One of my favourite industries is the healthcare sector. It’s defensive because we are willing to spend almost whatever it takes to remain alive and healthy. The healthcare industry is growing thanks to Australia’s ageing population and the continued introduction of new treatments.
That’s why I think the following three shares could be good investment opportunities:
Monash IVF Group Ltd (ASX: MVF)
Monash IVF is one of Australia’s largest IVF providers, with 48 locations across over Melbourne and Victoria. It boasts of having some of Australia’s highest success rates and it is continuing to invest in scientific and clinical innovation.
The share price is close to its all-time low, yet the long-term opportunity is still there. Many families have put off having children until later in life when it’s harder to conceive naturally. Plus there are other health factors like, on average, a higher obesity rate and other conditions which supposedly makes reproductive assistance more necessary.
It’s currently trading at 12x FY18’s estimated earnings.
Paragon Care Ltd (ASX: PGC)
Paragon is a supplier of healthcare equipment, devices and beds to facilities like hospitals and aged care providers.
The business is steadily increasing its product offering by acquiring other businesses which sell something that Paragon didn’t before, one of its most recent acquisitions was a surgery equipment supplier. The additional businesses should add economies of scale, create access to new clients and eventually turn Paragon into a one-stop-shop for healthcare items.
It’s currently trading at 16x FY18’s estimated earnings.
Japara Healthcare Ltd (ASX: JHC)
Japara is one of the country’s largest aged care providers. The sad reality is that a lot people can’t take care of themselves in their own home when they reach a certain age.
As one of the largest aged care providers, Japara is expected to be one of the biggest beneficiaries. In just the next few years Japara is projected to add more than 1,000 more beds to its total.
It’s currently trading at 24x FY18’s estimated earnings.
I expect all three shares will be pleasingly bigger in 10 years’ time, particularly Paragon and Japara. Monash IVF could face difficulties with low-cost competition. At the current prices I’m drawn to Paragon the most because of the expected growth of the bottom line in FY19 due to all the acquisitions.
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Motley Fool contributor Tristan Harrison owns shares of JAPARA DEF SET and Paragon Care Limited. The Motley Fool Australia has recommended Monash IVF Group Ltd and Paragon Care 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 Scott Phillips.