There aren't too many shares that I'd suggest should be in every investor's portfolio. Some shares are only good for retirees, some only good for young people and so on.
I think Ramsay Health Care Limited (ASX: RHC) and Healthscope Ltd (ASX: HSO) are two stocks that could be good for every investor's portfolio.
Here are three reasons why I think you need to buy them soon:
Very defensive earnings
Ramsay and Healthscope are the two biggest private hospital operators in Australia. They both have overseas operations as well, although Ramsay's international earnings are much bigger than Healthscope's.
Hospitals have some of the best earnings out of the healthcare sector because patients visit them all year round. Health and illness doesn't follow economic patterns or cycles. Staying alive and healthy are people's main focus, with a hospital playing a big part in that.
In a recession, I think Healthscope and Ramsay in-particular are two of the safest businesses.
Growth
The ageing demographics of Australia is an unstoppable tailwind for the businesses that can take advantage of it.
The number of retirees is expected to grow by 75% over the next two decades. Retirees are the group most likely to visit a hospital.
Ramsay and Healthscope can look forward to many years of increasing activity at their hospitals.
Expansion plans
Both companies are growing their hospital presence to take advantage of the growth of patients.
They are building new hospitals and expanding existing ones. This is costly in the short-term but should prove excellent in the long-term. It will take some time for the benefits to play out which is why Ramsay and Healthscope should make good long-term investments.
Foolish takeaway
Ramsay is currently trading at 24x FY18's estimated earnings with a grossed-up dividend yield of 2.48%. Healthscope is trading at 18x FY18's estimated earnings with an unfranked dividend yield of 3.49%.
I think both of them are trading at attractive long-term value and I'd be a buyer at these prices if I didn't already own both.
