One area of the market that has been a consistently strong performer over the last five years is the healthcare sector.
During this time the S&P/ASX 200 Health Care index has more than doubled in value. As a comparison, the S&P/ASX 200 is up approximately 7.7%. Both figures exclude dividends.
While I’m not convinced this level of outperformance will continue over the next five years, I do think that rising healthcare demand will allow at least some level of outperformance.
Because of this, I think it is well worth having a little exposure to the sector.
Three shares worth considering are listed below. Here’s why I like them:
CSL Limited (ASX: CSL)
If you only buy one healthcare share I would suggest you make it CSL. I think that this biopharmaceutical giant is one of the highest quality businesses on the Australian share market with strong long-term growth prospects from its expanding plasma collection network and fledgling influenza business. Its shares do trade at a premium to the market average, but I believe it is more than justified.
ResMed Inc. (ASX: RMD)
Another high-quality healthcare share that I would consider this month is ResMed. It is one of the world’s leading sleep treatment companies and recently announced its first quarter results. The company posted a 12% lift in revenue to US$588.3 million in the September quarter and a 23% jump in net profit to US$105.7 million. With the sleep treatment market tipped to grow strongly over the next decade, I believe ResMed is well-positioned to continue its positive form for a long time to come.
Volpara Health Technologies Ltd (ASX: VHT)
If you’re interested in small cap shares then Volpara could be a great option. It is a healthcare technology company that provides breast imaging analytics and analysis software. Last month the company provided an update on its first quarter performance. According to the release, Volpara saw cash received from customers jump 124% on the prior corresponding period. In addition to this, its share of the U.S. breast screening market grew from 3.7% to 5.6% during the quarter. This puts it on track to hit its 9% target by the end of FY 2019.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended VOLPARA FPO NZ. The Motley Fool Australia has recommended ResMed Inc. 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.