ASX healthcare shares might be the most defensive industry on the ASX for our portfolios.
No-one chooses when they're going to get sick. Illness or injury does not align with economic cycles. Our health is one of the most important factors in life, so people might be willing to pay almost whatever it takes to remain alive and healthy.
That's why the below two ASX shares could be worth a place in a portfolio:
Paragon Care Ltd (ASX: PGC)
Paragon is a small cap healthcare product distributor that sells items like surgery equipment, beds and devices to various clients like public hospitals, private hospitals and aged care operators.
Excluding the capital equipment business that Paragon is trying to divest, the rest of the Paragon business is going well. In the half year result the continuing business reported organic revenue growth of 9%.
Over the longer-term I believe Paragon can sort out its troubles and benefit from the ageing population tailwinds as demand for its various items grows.
If the current grossed-up dividend yield of 10% is maintained then it could be a good dividend share over the long-term.
Ramsay Health Care Limited (ASX: RHC)
The Liberal election win means that private health insurance premiums can continue to rise faster than inflation, although that isn't a great long-term strategy for the industry seeing as people's incomes are not rising as fast. Either way, private hospitals stand to benefit.
Ramsay is one of the largest private hospital operators in the world with major operations in Australia and Europe. I am attracted to the fact that Ramsay recently made a further acquisition in Europe, which places a high value on quality healthcare.
The company continues to open new hospitals and expand existing hospitals each year across its network, improving its earning potential.
Ramsay is one of only two ASX businesses to increase its dividend every year since 2000. It currently has a grossed-up dividend yield of 3%.
Foolish takeaway
Both businesses have the potential to be steady growers of dividends and earning potential for shareholders over the long-term. At the current valuations I'm attracted to Paragon more, but that's assuming it can turn its capital equipment business around or sell it in the near future.
