Ramsay Health Care Limited (ASX: RHC) and ResMed Inc. (CHESS) (ASX: RMD) are two great Australian businesses.
And it has been reflected in their exceptional returns to shareholders over the past 10 years.
In fact, an investment in Ramsay Health Care shares 10 years ago has achieved a total shareholder return (dividends plus capital gains) of 24% per annum.
While less visceral, an investment in the dual-listed ResMed Inc. still achieved an exceptional return of 11.8% per annum.
Are better times ahead?
However, despite their good fortunes over the past decade analysts continue to be bullish on both companies' future.
According to the Fairfax Press, investment bank Morgans retained an add rating on Ramsay Health Care shares and slapped it with a price target of $73.11. Morgans says an aging population, a track record of above-average growth and a trend towards public hospital outsourcing will benefit Australia's largest hospital operator. Ramsay is rapidly expanding internationally and in parts of Europe and Asia.
ResMed, a leader in the manufacture of devices for the treatment of sleep apnoea and other respiratory disorders, was upgraded by analysts at Deutsche Bank from sell to hold. The investment bank notes competitive risks, but sees the recent fall in share price and the benefits from a falling dollar as a reason to rerate the stock, Fairfax wrote.
Buy, Hold or Sell?
I always take analyst price targets with a pinch of salt. However, I'd agree with both banks that ResMed and Ramsay are great companies, with bright futures. At today's prices, I'm a net buyer of ResMed shares, but Ramsay shares are a little too expensive for me.
