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.