With the tailwinds of ageing populations and increased chronic disease burden, I believe the healthcare sector is a great place to look for buy and hold investments.
Two companies which I think are in a great position to grow their earnings at an above-average rate for the next decade are listed below. Here's why I think they are in the buy zone:
CSL Limited (ASX: CSL)
Thanks to the strong demand for this biotherapeutics giant's immunoglobulins and specialty products and its fledgling vaccines business, I believe it is in a strong position to continue its explosive growth for the foreseeable future.
In FY 2018 CSL expects net profit after tax to be in the range of $1,480 million to $1,550 million in constant currency terms. This means growth of approximately 16% year-on-year at the high-end of its guidance range. I believe this level of growth and its world class business makes CSL a great option at the current share price.
Ramsay Health Care Limited (ASX: RHC)
Due to a post-results decline of around 11%, I think this private hospital operator's shares are trading at a great price for patient buy and hold investors. Although the market appeared to be disappointed that core earnings is expected to grow between 8% and 10% in FY 2018, I believe that the company has the potential to accelerate its growth in the future through acquisitions and expansions.
This strong long-term growth potential, the expected increased demand for healthcare services, and its defensive qualities, all make it worth paying 28x earnings to own its shares in my opinion. In light of this, I would class Ramsay as one of the best buy and hold investments on the ASX at the moment.
