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Why I would buy and hold CSL and 2 other ASX healthcare shares

Over the last five years the healthcare sector has certainly been a great place to invest.

During this time the S&P/ASX 200 Health Care index has put on a gain of 106%. As a comparison, the S&P/ASX 200 has gained 13.5% excluding dividends.

Whilst I’m not convinced the returns will be anywhere near as strong over the next five years, I still feel there are favourable tailwinds that could help the sector continue its outperformance.

In light of this, here are three healthcare shares that I think would be great buy and hold investment options:

CSL Limited (ASX: CSL)

My favourite healthcare share and buy and hold option on the local market is this biotherapeutics company. As well as having a strong core business, expanding plasma collection network, and fast-growing influenza business, the company has a pipeline of products under development that I expect to underpin its growth in the long-term. And given its heavy investment in research and development, I expect this pipeline to expand further and keep CSL at the forefront of its key markets for the foreseeable future.

Nanosonics Ltd (ASX: NAN)

Another quality option in the healthcare sector is this infection control specialist. I thought it reported one of the strongest half year results last month when it delivered a 36% increase in first half sales to $40.7 million and a 195% lift in operating profit before tax to $11 million. This strong result was driven by increasing demand for its trophon EPR product and the consumables it requires. Given the large market opportunity for the product and its best-in-class status, I expect more of the same in the second half and FY 2020. After which, the potential launch of a new product is likely to support the company’s growth.

ResMed Inc (ASX: RMD)

I think that this sleep treatment-focused medical device company would be a fantastic buy and hold option for investors. This is due to the quality of its products, its wide distribution, and the fact that the sleep treatment market is tipped to grow strongly over the next decade. So with the ResMed share price trading notably lower than its 52-week high, I feel now could be a good time to pick up shares.

And here are three quality blue chip shares that could be great buy and hold options right now.

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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 Nanosonics Limited. 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.

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