If I had to choose just one ASX stock to buy and hold right now, it would be ResMed Inc (ASX: RMD).
That does not mean it will always be my top pick. Markets change, valuations move, and new opportunities emerge. But as things stand today, I think ResMed combines scale, structural growth, innovation, and financial strength in a way that is hard to ignore.
Here is why.
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A massive, underpenetrated opportunity
ResMed operates in sleep and breathing health, primarily treating obstructive sleep apnoea. The opportunity here is enormous.
According to the company's recent investor presentation, more than 1 billion people globally are estimated to suffer from sleep apnoea, yet penetration remains low, with less than 20% of patients diagnosed or treated in the US and under 10% in the rest of the world.
That gap represents a very long runway for growth. Ageing populations, higher obesity rates, and increasing awareness of sleep health are all powerful structural tailwinds. Even the rise of GLP-1 medications appears to be increasing diagnosis and therapy uptake rather than reducing it, based on the real-world data shared in the company's presentation.
This is not a short-cycle story. It is a decades-long healthcare trend.
Financial strength and operating momentum
ResMed's latest results showed why I have confidence in the business model.
In the December quarter, ResMed delivered revenue of US$1.4 billion, up 11% year on year, with gross margin expanding to 61.8%. Operating income increased 18% and diluted earnings per share rose to US$2.68.
That combination of double-digit revenue growth and expanding margins tells me that it is not just growing, it is scaling.
The balance sheet also remains strong. As highlighted in the presentation, the company had a net cash position of US$715 million as at Q1 FY26. That provides flexibility for further R&D, acquisitions, dividends, and buybacks.
A connected ecosystem, not just a device maker
One of the biggest reasons I would choose ResMed over many other healthcare names is that it is no longer just a hardware company.
The company describes itself as a global leader in connected and digital health. It has processed more than 24 billion nights of respiratory medical data and has tens of millions of patients connected to its cloud platforms.
That data advantage is powerful. It strengthens clinical relationships, improves patient adherence, and creates switching costs. It also enables AI-enabled features such as Smart Comfort, which recently received FDA clearance and is designed to personalise therapy settings.
When I look for a single stock to hold long term, I want network effects and ecosystem advantages. ResMed increasingly has both.
Innovation is constant
Another reason I would be comfortable holding this ASX stock for many years is its culture of innovation.
The investor presentation outlines new product rollouts such as AirSense 11 in additional global markets and new fabric-based mask launches. It also highlights the expanding digital pathway from diagnosis through to long-term therapy adherence.
This is not a company standing still. It continues to invest in R&D and new technologies to support long-term growth. Over a five-year horizon, management has outlined high single-digit revenue growth with earnings growth above revenue growth.
That operating leverage is exactly what I want in a compounding business.
Foolish Takeaway
If I could only own one ASX stock today, I would want structural, non-cyclical demand, global exposure, strong margins and cash flow, a defensible competitive position, ongoing innovation, and a healthy balance sheet.
ResMed ticks all of those boxes.
Of course, no stock is risk-free. Healthcare regulation, competition, reimbursement changes, and macroeconomic factors can all influence performance. But when I weigh up the long-term drivers, scale advantages, and financial quality of the business, ResMed stands out to me as a high-conviction, buy-and-hold candidate right now.
