The ASX healthcare share sector has a number of impressive businesses in its ranks. Two of those to consider are Sonic Healthcare Ltd (ASX: SHL) and CSL Ltd (ASX: CSL) shares.
Both businesses have been on the ASX for many years. CSL is a major vaccine and blood plasma product business, it also provides other lifesaving treatments. A significant portion of the company's earnings come from the US.
Sonic Healthcare is a global pathology business with a presence in Australia, Germany, the UK, Switzerland, the US, and other Western countries.
They're quite different businesses and each of them offer interesting profit profiles.
I'm going to share my latest thoughts on each business and which one I'd rather buy.
CSL shares
CSL is the largest healthcare business in Australia. It invests an impressive amount into research and development each year to unlock new (or an upgraded version of existing) products.
The healthcare giant has done well over the last couple of decades, but the CSL share price has fallen approximately 15% since October 2024. I can understand why investors are feeling a little nervous about the company right now.
As reported by various media, including CNBC, the new leading healthcare official in the US is Robert F. Kennedy Jr. He is "a prominent vaccine skeptic" and "now leads the Department of Health and Human Services and wields enormous power over the federal agencies that regulate vaccines and set shot recommendations", as reported by CNBC.
Kennedy has said he will review the childhood vaccination schedule, and is reportedly preparing to "remove and replace members of external committees that advise the government on vaccine approvals and other key public health decisions", according to CNBC.
If there's a reduction of demand for CSL products in the US, then this could impact CSL's earnings for the foreseeable future.
I think that situation explains why the CSL share price has fallen. But, it's important to note the business has a number of other products and growth avenues outside of the US. Pleasingly, the company's price-earnings (P/E) ratio is now lower and more appealing, making it better value.
In the FY25 half-year result, CSL grew underlying revenue by 5% to $8.5 billion and net profit rose 6% to $2 billion.
According to the forecasts from UBS, the CSL share price is valued at 25x FY25's estimated earnings.
Sonic Healthcare shares
The Sonic Healthcare share price has gone down 7% since mid-February, though its recent result was everything I wanted to see.
Revenue rose 8% to $4.67 billion, operating profit (EBIT) rose 12% to $827 million, and earnings per share (EPS) grew 15% to 49.2 cents. The business decided to pay an interim dividend per share of 44 cents, up 2.3%.
I liked seeing the company generate organic revenue growth of 6.1% (which excludes the benefit of revenue from recent acquisitions). Operating leverage was also a good sign, where various profit levels grew faster than revenue.
The future looks bright for earnings growth with "ongoing strong organic revenue growth", operating leverage, synergies from recent acquisitions, further potential acquisitions, and efforts to include AI across the business.
According to UBS forecasts, the Sonic Healthcare share price is valued at 24x FY25's estimated earnings.
With a more certain growth outlook over the next few years, I think I'd rather go for Sonic shares over CSL shares. Sonic also has a larger dividend yield, which is expected to be 4% in FY25 (excluding any franking credits), according to UBS. But, both businesses are expected to grow profit in the coming years, which is positive.
