Due to ageing populations and improving technologies and treatments, demand for healthcare services is expected to grow strongly over the next few decades.
As a result, the healthcare sector could be a good place to consider investing with a long term view.
But which shares should you consider buying? Two highly rated ASX healthcare shares to consider are listed below:
Healius Ltd (ASX: HLS)
The first healthcare ASX share to look at is Healius. It is one of Australia's largest pathology and diagnostic imaging providers offering services via a number of brands. These include Dorevitch Pathology, QML Pathology, Laverty Pathology, and Healthcare Imaging Services.
Healius was a very positive performer in FY 2021. For the 12 months ended 30 June, the company reported a 22% increase in revenue to $1,913.1 million and the doubling of its underlying EBIT to $266.5 million.
The standout performer during the year was its key Pathology business. It reported revenue growth of 25% to $1,452.1 million and EBIT growth of 103% to $252.8 million. This reflects strong demand for community and commercial COVID-19 testing.
One broker that believes there's more to come in FY 2022 is Credit Suisse. Earlier this week the broker retained its outperform rating and lifted its price target to $5.50.
Credit Suisse is positive on the company due to its belief that COVID testing volumes will remain strong for some time to come.
Ramsay Health Care Limited (ASX: RHC)
Another ASX healthcare share to look at is Ramsay Health Care. It provides quality healthcare services to over 8 million patients each year through a network of facilities across 10 countries and over 500 locations.
Although trading conditions have been tough over the last 18 months and recent lockdowns are likely weighing on its performance, the company has been tipped to bounce back strongly. Particularly given the pent-up demand for healthcare services.
Goldman Sachs is a fan of Ramsay. It currently has a buy rating and $74.00 price target on the company's shares.
The broker believes its valuation is undemanding for a defensive asset leveraged to improving vaccine rates and a favourable growth profile. It also notes that it has material balance sheet optionality. This could support acquisitions or share buybacks.
