The economy is made up of a number of different sectors and businesses. The healthcare industry is one of the best sectors to invest your money in my opinion.
Here are a few reasons why you should consider Cochlear Limited (ASX: COH) and CSL Limited (ASX: CSL).
Defensive earnings
Healthcare offers shareholders a defensive earnings profile because of how integral the product or service is.
People will value being alive and healthy over most other things in life.
CSL offers a variety of services like plasma products, vaccines and pharmaceuticals which users will all value over a trip to the movies and other lifestyle expenses.
Cochlear gives its users a life changing ability to improve their hearing with hearing implants.
Ageing demographics
There is a unique set of circumstances happening now and over the next few decades where the population of people older than 65 is going to significantly increase. This should be a big boost to all the companies that benefit from elderly customers. Cochlear and CSL could be two of the biggest winners.
International expansion
Australia has a small population and it doesn't offer much room for growth. If a business can successfully expand overseas then the world becomes their oyster.
CSL and Cochlear both earn a large majority of their earnings from overseas and I imagine this will continue to be the case as they grow in Europe and North America.
Time to buy?
Cochlear is trading at 38x FY18's estimated earnings and CSL is trading at 30x FY18's estimated earnings.
Both shares are wonderful businesses but I don't think they're buys at the current prices. I'd wait until they're both at least 15% to 20% cheaper before buying over the next six months.
