The healthcare sector certainly has been a great place for investors to put their money over the last five years.
During this time the S&P/ASX 200 Health Care index has doubled in value.
The good news is that I believe favourable tailwinds means that the sector could continue its outperformance over the next five years.
Three healthcare shares that I think would be great options for investors to buy and hold over the next five years are listed below. Here's why I like them:
Cochlear Limited (ASX: COH)
Cochlear is one of the world's leading hearing solutions companies and one of my favourite growth shares on the Australian share market. It has a long track record of delivering strong earnings growth and returns for shareholders. Over the last five years its earnings have grown by an average of 12.6% per annum, which has ultimately led to an average annual total return of ~30% per annum. This strong earnings growth has continued in FY 2019, with the company posting an 16% lift in half year profits this morning. Pleasingly, I expect more of the same in the coming years thanks to increasing demand for its hearing implants globally due to ageing populations. This could make it worth seizing on today's share price weakness.
CSL Limited (ASX: CSL)
CSL is one of the world's leading biotherapeutics companies and a great buy and hold option. It has two key businesses – CSL Behring and Seqirus. CSL Behring produces therapies for the immunoglobulins, albumin, haemophilia, and specialty markets, whereas Seqirus is focused on influenza vaccines. I believe the quality of the company and its management team, its lucrative pipeline of products under development, its high R&D spending, and growing plasma collection network have positioned it perfectly to grow at an above-average rate over the next decade.
ResMed Inc (ASX: RMD)
I think that this sleep treatment-focused medical device company would be a great buy and hold investment option. Although its recent second quarter result fell short of the market's lofty expectations, it was undoubtedly still a strong result. I believe this level of growth can continue for the foreseeable futures thanks to its leading position in a sleep treatment market which is tipped to grow strongly over the next decade.
