According to a recent presentation by Ramsay Health Care Limited (ASX: RHC), in Australia the 65 to 84-year -old age group is forecast to more than double from 3.1 million today to over 7 million by 2054.
Playing a key role in driving this growth will be the huge leap in average life expectancy to 95 years by 2050. Because of this I believe the healthcare sector is one of the best parts of the market for investors to focus on in the long-term.
Three healthcare shares which I believe are positioned for long-term earnings growth are listed below. If I had $15,000 to invest I would split it evenly between them.
Cochlear Limited (ASX: COH)
As Australia's population ages I expect this leading implantable hearing solutions provider will see demand for its products continue to increase. Although at 31x estimated forward earnings Cochlear may appear expensive, it is worth remembering that its shares traditionally trade in or around this level. Whilst investors could wait for a slight pull-back in its share price, there's no guarantee that one will come. In my opinion Cochlear is a great buy and hold investment today.
Japara Healthcare Ltd (ASX: JHC)
Australia's aged care operators were amongst the worst performers on the ASX in 2016, but I'm confident the worst is now behind them. Japara would be my pick of the industry at present as I believe it has the strongest long-term growth prospects. With approximately 473,000 people aged 85 or older in Australia, the company plans to meet the growing demand for aged care services by building and operating more than 2,500 beds by 2025.
Ramsay (ASX: RHC)
This private hospital operator would be my number one pick in the healthcare sector. Its high quality management team, growing global presence, and the strong tailwinds it is experiencing make Ramsay the perfect buy and hold investment in my opinion. Another bonus is its fast-growing dividend. In each of the last 10 years Ramsay has increased its dividend by an average of 17% per annum.
