One of the benefits of investing in the health care sector is the defensive nature of earnings which many businesses in the industry enjoy.
These defensive qualities often translate to their share prices, with health care stocks enjoying both a premium rating and lower volatility.
The premium rating enjoyed can often cause a stumbling block for investors who want to add these quality businesses to their portfolios. The problem is that with the stocks commanding premium prices it is hard to identify an appealing entry point.
Here are three health care companies that all have defensive earnings streams, growth potential and arguably are priced at levels which could make them interesting for long-term investors.
CSL Limited (ASX: CSL) has been a superb long-term investment for shareholders and there is little reason to not see that trend continuing. Today its shares trade close to their 52-week high but considering its growth prospects the multiple would not appear unreasonable.
Medibank Private is Australia's largest health insurer with a massive market share. Technically the company doesn't sit within the health sector, however it obviously provides owners with exposure to the industry. With the Federal government expected to float the company in the coming months, investors may want to take a look at the Medibank prospectus and review the performance of its smaller rival NIB Holdings Limited (ASX: NHF).
Primary Health Care Limited (ASX: PRY) is a leading provider of bulk billed services across Australia. Its style of service and the convenience of its offering is likely to grow in appeal as the Australian population ages which bodes well for the growth profile of Primary. With the share price losing 14% this year, now could be the opportunity investors have been waiting for.
