S&P/ASX 200 Index (ASX: XJO) healthcare share Ramsay Health Care Ltd (ASX: RHC) is in the green today following two trading days of heavy selling.
In afternoon trade on Tuesday, the Ramsay share price is up 0.5% at $40.58 a share.
That will come as welcome news to shareholders after the ASX 200 healthcare share closed down a precipitous 6.8% on Friday following the release of its full-year results.
That decline, however, looks to reinforce Shaw and Partners' Jed Richards' buy recommendation for Ramsay Health Care (courtesy of The Bull).
Why Ramsay shares could be bargain-priced
"Ramsay is Australia's biggest private hospital operator. It also operates in the UK and Europe," Richards explains.
He noted that the ASX 200 healthcare share had tumbled from $56.47 on 6 March to trade for $44.42 a share on 29 August. And shares have since declined to the current $40.58.
According to Richards:
In our view, the shares have been oversold. The company had a market capitalisation of more than $10 billion on 29 August. The company is well managed, and we expect RHC to improve in fiscal year 2025.
What's been happening with the ASX 200 healthcare share?
As mentioned up top, Ramsay reported its FY 2024 financial results on Friday, 30 August.
And those results revealed a difficult year for the private hospital operator.
While total revenue increased 9.4% year on year to $16.77 billion, earnings before interest and tax (EBIT from continuing operations) went the other direction, falling 0.4% to $998 million.
And feeling the impacts of cost inflation, the ASX 200 healthcare share reported a 2.6% decline in profit after tax from continuing operations, which came in at $271 million.
Despite the dip in profits, management pleased passive income investors with a final dividend of 40 cents per share, fully franked. That's up 60% from the prior final dividend. And it brings the full-year passive income payout to 80 cents per share.
This sees Ramsay shares trading on a fully franked dividend yield of 2.0%. And if you're looking to bag that final dividend, you'd best hurry. Ramsay shares trade ex-dividend tomorrow, 4 September. Meaning you'll need to own shares at market close today to have rights to that payout.
Eligible investors can then expect to see that passive income hit their bank account on 26 September.
Looking to the year ahead, the ASX 200 healthcare share forecasts growth in its net profit after tax from continuing operations in FY 2025. Though margin recovery is expected to be slow, impacted by ongoing inflationary pressures and investments in business enablement programs.
The Ramsay share price is down 24% year to date.
