With the global population both growing and ageing, I think the healthcare sector is a great place to look for buy and hold investment options.
Three of the best in my opinion are listed below. Here’s why I like them:
ResMed Inc. (ASX: RMD)
Over the last decade this sleep treatment specialist’s shares have provided an average annual total return of approximately 23.7%. That would make a $10,000 investment 10 years ago worth almost $84,000 today. While the returns may not be quite as impressive over the next decade, I believe the company’s industry-leading products and the growth of the sleep treatment market have put ResMed in a position to deliver earnings growth that could allow it to outperform the market. Because of this, I think it is a great buy and hold option for Australian investors.
Sonic Healthcare Limited (ASX: SHL)
This international medical diagnostics company’s shares have performed better than most over the last 10 years. During this time Sonic Healthcare’s shares have produced an average annual total return of approximately 9.6%, turning a $10,000 investment into $25,000. If demand for its pathology, radiology and clinical services rises as populations grow and age, then Sonic Healthcare could benefit greatly and continue its strong run. I think that this could make it worth a closer look.
Zenitas Healthcare Ltd (ASX: ZNT)
I think that recently listed Zenitas Healthcare is one of the more promising small cap shares in the healthcare sector. It provides home care and health services across Australia. Which I believe is a market that could grow significantly in the future, especially after the recent Federal Budget pledged to support older Australians that want to remain at home instead of going into aged care. In light of this, I would sooner buy Zenitas shares than aged care providers like Estia Health Ltd (ASX: EHE).
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ResMed Inc. and Zenitas Healthcare Ltd. 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 Scott Phillips.