Buying your first shares in quality, growing businesses is incredibly exciting!
If you’re starting out on your investment journey you have potentially decades ahead of you to grow and compound your wealth.
Time is a massive advantage when investing so even though you’ll probably be starting off a small amount to invest, starting early, investing regularly, and learning from any mistakes will help drive you towards your goals.
Though not technically a company, buying units in an exchange traded index tracking fund can be an excellent way to start and gain exposure to a large number of companies. These funds have a long history of outperforming actively managed investment funds and reduce the firm specific risk which comes with owning individual companies.
A fund like iShares Global Healthcare (ASX: IXJ) for example offers exposure to big names like Johnson & Johnson and Pfizer Inc and the long growth run-way that healthcare offers.
But there is still something special about owning a piece of a company directly and participating in the business as an investor. If you’re comfortable taking on the extra risk, here are two companies to consider buying today.
Ramsay Health Care Limited (ASX: RHC)
Ramsay Health Care is a big, geographically diverse hospital operator with operations in Australia, the UK and across Europe. This provides a level of diversification to the company’s revenues which can reduce the risk to earnings if there is a sudden drop from one country.
Ramsay Health Care has a strong history of growing revenue and I think it will be a clear beneficiary of the long-term trend of increasing healthcare spending going forward. It offers a dividend yield of 2.3% which, sure, is not earth-shattering, but it is a good starting point, adds some cash-flow to your pocket and I would expect this to grow over the years to come.
ResMed Inc. (CHESS) (ASX: RMD)
ResMed manufactures breathing assistance products and should also benefit from the trend of aging populations over the next decade. The company has steadily grown revenues over the last 10 years, and although a reasonably mature business, has a good return-on-equity and low debt. These are good signs a company is well set up to compound earnings to produce considerable cash flows over time.
It’s worth being aware that ResMed is primarily listed on the New York Stock Exchange, but is listed on the ASX as what is known as a Chess Depositary Instrument, or CDI. Ten CDIs on the ASX represent one share of common stock on the NYSE.
Where to invest $1,000 right now
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The Motley Fool Australia has recommended Ramsay Health Care Limited and 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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