One area of the share market that has been performing consistently well in recent years is the healthcare sector. Since this time in 2015, the S&P/ASX 200 Health Care index has generated a return of 122% for investors.
This has been underpinned by increasing demand, better technologies and treatments, and ageing populations.
Pleasingly, these tailwinds aren't going away any time soon. In light of this, it is no surprise to learn that the sector has been tipped as a great place to invest over the 2020s.
But which healthcare shares should you buy? Here are two highly rated options:
CSL Limited (ASX: CSL)
CSL is one of the world's leading biotherapeutics companies. It has been an exceptionally positive performer over the last decade thanks to a combination of acquisitions, its research and development (R&D) activities, growing plasma collection network, and its leading therapies. Its portfolio of therapies currently includes the likes of Privigen, Hizentra, Idelvion, and Afstyla. Though, this will be boosted further in the coming years thanks to its almost billion-dollar annual investment in R&D.
UBS appears confident that this strong form can continue. The broker recently retained its buy rating and $346.00 price target on the company's shares. While it notes that plasma collection conditions are tough in some markets because of COVID-19, it remains positive on its outlook. Especially given how it has a range of options to mitigate this headwind and a burgeoning R&D pipeline.
Pro Medicus Limited (ASX: PME)
Pro Medicus is healthcare technology company that provides radiology information systems (RIS), picture archiving and communication systems (PACS), and advanced visualisation solutions to healthcare organisations across the globe.
Due to the quality of its software, its sizeable market opportunity, and the shift away from legacy systems, Pro Medicus has been tipped to have a big future.
One broker that is positive on the company is Morgans. This month the broker retained its add rating and lifted its price target on the company's shares to $35.02. It made the move after the company announced the signing of a five-year contract with MedStar Health worth a total of A$18 million.
