Due to Australia's growing and ageing population, demand for healthcare services is expected to rise considerably over the next two to three decades.
In my opinion this makes it a great area of the market to consider long-term buy and hold investments.
Two healthcare shares which I think fit the bill are listed below:
Japara Healthcare Ltd (ASX: JHC)
Arguably one of the biggest winners from a larger and older population will be the aged care providers. Due to Japara investing heavily in new places (beds) in order to capture the expected strong demand, I believe it is positioned perfectly to grow its bottom line strongly over the long-term.
While earnings may be reasonably flat this year as it focuses on its investments, I expect strong profit growth in FY 2019 and beyond when these new beds come on line.
Zenitas Healthcare Ltd (ASX: ZNT)
Zenitas is a small-cap home care and health services company with large-cap ambitions. In FY 2017 it delivered a 27% increase in underlying earnings before interest, tax, depreciation, and amortisation to $7 million. Pleasingly this was almost 7% higher than its prospectus forecasts.
Due to the fact it operates in a highly fractured industry, management believes it can grow significantly through acquisitions in the future. And with the National Healthcare Reform pushing the burden of healthcare services from hospitals into primary care, it stands to profit greatly.
