Of all the ASX healthcare shares, Sonic Healthcare Ltd (ASX: SHL) is one of the most appealing businesses to me in the sector.
Sonic Healthcare describes itself as a global healthcare provider with specialist operations in laboratory medicine and pathology, radiology, general practice medicine and corporate medical services.
It's headquartered in Sydney, but it has operations in a number of countries including Australia, Germany, USA, Switzerland, the UK, Belgium, Poland and New Zealand.
There are (at least) three great reasons to like the business.
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Revenue growth with good tailwinds
The business is regularly delivering good revenue growth, which is an important element of long-term success. Sonic Healthcare is benefiting from the fact that there are ageing and growing population demographics in its core markets.
The FY26 half-year result showed the ability of the business to grow – revenue rose 17% year over year to $5.4 billion. That included organic revenue growth of 5%.
Sonic Healthcare has managed to drive its revenue through both organic expansion and acquisitions.
The great thing about being a global business is that Sonic can allocate its organic investment and acquisition attention to whichever market or opportunity it thinks is the best place for its money.
I believe the ASX healthcare share will be able to continue growing revenue at a good pace for the foreseeable future.
Good profit growth
Profit growth is even more important than revenue growth, of course.
Sonic's profit is growing at a pleasing pace, which I think the market is underestimating. In the FY26 half-year result, Sonic Healthcare revealed operating profit (EBITDA) growth of 10%, net profit growth of 11% and operating cash flow growth of 10%.
As the business become larger, I expect its profit margins to increase, as it did in the past. The company noted that its underlying EBITDA margin did increase in the HY26 period.
According to the projection on Commsec, the Sonic Healthcare share price is valued at less than 18x FY26's estimated earnings. The forecast on Commsec suggests the business could grow its earnings by 15% in FY27 and another 14% in FY28.
If the ASX healthcare share is able to continue growing its earnings by more than 10% in the coming years, it could justify more market excitement again about its prospects.
Rising dividend
One of the benefits of owning the ASX healthcare share is that the business is regularly increasing its payout.
It has increased its annual payout each year since FY13, meaning it has been able to give investors a pleasing level of payout consistency.
According to the projection on Commsec, the business could pay an annual dividend per share of $1.095 in FY26, which translates into a 5.25% dividend yield, excluding any franking credits.
Overall, I think this business is undervalued and has a promising future.
