With demand for healthcare services expected to rise strongly over the next couple of decades as Australia's population ages, I think the healthcare sector is a great place to look for buy and hold investments.
Two shares which I think are great options are listed below. Here's why I think investors should consider them:
The Ramsay Health Care Limited (ASX: RHC) share price performance over the last 12 months has no doubt been a bit of a disappointment for its shareholders. The private hospital operator's shares are down 7% since this time last year, compared to a 4% gain by the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).
The good news for non-shareholders is that I think this has presented investors with an excellent opportunity to buy its shares at a fair price. Whilst 28x annualised earnings might seem expensive, I think the expected long-term demand for its services across the world will result in above-average earnings growth that more than justifies the premium.
The 1300 Smiles Limited (ASX: ONT) share price has also been a bit of a disappointment of late, falling almost 8% since the start of the year. The reason for this decline was a weak half-year result due to soft trading conditions. But with management optimistic that trading conditions will improve for the dental care business in the near future, I feel now could be a good time to consider an investment.
Especially considering the company sees significant opportunities to boost its growth through acquisitions. With zero debt on its books and a strong cash balance, I feel the company is in a solid position to take advantage of the highly fragmented dental providers industry.
