Healthcare is a very good industry to be invested in. Patients don't mind paying what it takes to achieve a medical result and demand for services is not dictated by economic cycle; it is dependent on the medical condition (such as illness).
There are some healthcare stocks that would be considered 'growth stocks', but there are some out there that have very pleasing dividend characteristics. Here are four healthcare businesses that could be good additions to a dividend portfolio:
Monash IVF Group Ltd (ASX: MVF)
Monash IVF is Australia's second largest listed IVF provider with a market capitalisation of $448 million.
There is a growing trend for families to put off having children until later in life for one reason or another. The couple could find it difficult to conceive and therefore more likely to need medical intervention. This trend should boost Monash IVF as it discovers new techniques to help the hopeful parents.
Monash IVF is trading at 14x FY17's estimated earnings with a grossed-up dividend yield of 6.22%.
Virtus Health Ltd (ASX: VRT)
Virtus is the largest IVF provider listed on the ASX and has a market capitalisation of $480 million.
It is also a beneficiary of the trends that I mentioned about Monash IVF. However, Virtus is different to its rival because it has a much larger presence overseas. It's now located in Ireland, Denmark and Singapore. This overseas expansion mitigates any local risk in Australia.
Virtus is trading at 14.6x FY17's estimated earnings with a grossed-up dividend yield of 6.69%.
Sonic Healthcare Limited (ASX: SHL)
Sonic Healthcare is one of Australia's largest listed healthcare businesses with a market capitalisation of $9.26 billion.
It has a large pathology business with operations in Australia, New Zealand, the USA, Germany, Switzerland, the U.K. and Belgium. Having a global approach is an effective way to shield itself from risk in any one country and also gives Sonic the option to expand in the country it sees as the best opportunity.
Sonic Healthcare is trading at 20x FY17's estimated earnings with a partially franked dividend yield of 3.38%. The dividend has grown or been maintained every year since 1994.
NIB Holdings Limited (ASX: NHF)
NIB is Australia's second largest listed private health insurer with a market capitalisation of $2.57 billion.
It has been steadily growing the number of its policyholders each year whilst also keeping a good control of the claims it experiences. The business could grow even more as it slowly increases its market share of private health insurance policyholders.
NIB is trading at 21.8x FY17's estimated earnings with a grossed-up dividend yield of 4.27%.
Foolish takeaway
I think all four of these businesses could be good additions to a dividend portfolio with their growing dividends.
