Why CSL (ASX:CSL) and this ASX healthcare share are rated as buys

The healthcare sector has been a great place to invest. Could this trend continue?

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rising medical asx share price represented by excited doctors dancing in ward

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The healthcare sector has been a great place to invest over the last five years. Since this time in 2016, the S&P/ASX 200 Health Care index has risen an impressive 98%.

This compares to a ~34% gain by the S&P/ASX 200 Index (ASX: XJO) over the same period, excluding dividends.

While there’s no guarantee that the sector will continue this outperformance over the next five years, there are a number of positive tailwinds that are supportive of growth. This could make it worth considering a long term investment in the space.

But which ASX healthcare shares should you consider? Here are two that are rated highly:

CSL Limited (ASX: CSL)

CSL is one of the world’s leading biotherapeutics companies. Its shares are up approximately 150% over the last five years due to a number of factors. This includes successful acquisitions, its high level of investment in research and development (R&D) activities, its growing plasma collection network, and its leading therapies and vaccines.

In respect to its therapies, CSL’s portfolio includes lucrative and life-saving products such as Privigen, Hizentra, Idelvion, and Afstyla. These will be added to in the coming years thanks to its almost billion-dollar annual investment in R&D.

One broker that sees value in the CSL share price at present is Credit Suisse. The broker currently has an outperform rating and $315.00 price target on its shares.

Pro Medicus Limited (ASX: PME)

Pro Medicus is a healthcare technology company. It provides healthcare organisations with radiology information systems (RIS), picture archiving and communication systems (PACS), and advanced visualisation solutions.

Thanks to its industry-leading technology and the structural shift away from legacy systems, Pro Medicus has been growing at a strong rate in recent years. Pleasingly, this has continued in FY 2021. For example, during the first half, the company reported a 7.8% increase in revenue to $31.6 million and a 25.9% jump in underlying profit before tax to $18.76 million.

Looking ahead, the company still has a large pipeline of sales opportunities that could be converted in the near future and drive further growth over the next decade.

Goldman Sachs is a fan of Pro Medicus. It currently has a buy rating and $53.80 price target on its shares.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Pro Medicus Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has recommended Pro Medicus Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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