MENU

3 healthcare shares with big dividend yields

There’s always a balance to weigh up between dividend income potential, growth and how defensive the earnings are.

Some businesses have very big dividend yields but a lot of them are dangerously close to reducing the dividend at any time due to high payout ratios or because they operate in a dangerous industry.

The healthcare industry could be the best place to find the perfect mix because most businesses in the sector have defensive and growing earnings due to an ageing population and a growing population.

Perhaps these three shares could provide good long-term returns and big dividends:

Japara Healthcare Ltd (ASX: JHC)

Japara is one of the largest aged care providers in Australia. Australia’s ageing population is projected to lead to a huge increase of aged care residents. The number of people over the age of 65 is expected to increase by 75% over the next two decades.

Although the business does rely on government funding for a lot of its revenue, the residents pay for the rest and will want to stay at Japara’s higher-quality establishments even if they have to pay a little more.

Japara is currently trading at 18x FY17’s earnings with a grossed-up dividend yield of 8.10%.

Regis Healthcare Ltd (ASX: REG)

Regis is another of Australia’s largest aged care providers and is likely to benefit (or suffer) just as much as Japara, if not more.

Acquisitions, construction of new facilities and expansions of current facilities should see Regis add thousands more beds over the coming years as its takes advantage of the ageing tailwind.

Regis is currently trading with a trailing grossed-up dividend yield of 7.43%.

Australian Pharmaceutical Industries Ltd (ASX: API)

Australian Pharmaceutical Industries is best known for its Priceline pharmacy brand. The business has decent long-term potential thanks to organic growth in the beauty industry and health food industry.

Economies of scale allow the business to buy stock at cheaper prices compared to competitors, which it can then pass on some of the savings to consumers.

Australian Pharmaceutical Industries is currently trading with a trailing grossed-up dividend yield of 6.56%.

Foolish takeaway

All three shares could be excellent dividend stocks and grow in the long-term. At the current prices I think Australian Pharmaceutical Industries will likely deliver the biggest shareholder returns over the next two years, but Japara could be the best long-term choice and it also has the biggest yield.

An even better dividend option than the three I’ve mentioned could be our top dividend pick for FY18.

OUR #1 dividend pick to grow your wealth over the new financial year is revealed for FREE here!

Financial year 2018 is here and The Motley Fool’s dividend detective Andrew Page has revealed his must buy dividend share to grow your wealth in 2018.

You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our #1 dividend share recommendation now.

Motley Fool contributor Tristan Harrison owns shares of JAPARA DEF SET and Regis Healthcare Limited. The Motley Fool Australia has recommended Australian Pharmaceutical Industries Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!