Year-to-date the S&P/ASX 200 Health Care (Index: ^AXHJ) (ASX: XHJ) has thoroughly outperformed the benchmark S&P/ASX 200 index with a 16% gain.
Despite the strong gain I still believe there are some great options for investors in the healthcare sector. Here are three to consider:
Japara Healthcare Ltd (ASX: JHC)
Australia's population is ageing and demand for aged care services is expected to increase at a strong rate over the next decade. I believe this puts aged care provider Japara Healthcare in a great position to deliver above-average earnings growth. Especially with the company working hard to meet the expected demand. Management intends to increase its number of places by 29% within the next three years. While the industry is prone to regulatory risk, I believe the risk/reward on offer with a buy and hold investment in Japara is compelling.
Monash IVF Group Ltd (ASX: MVF)
With its share price down 10% year-to-date, I believe the shares of this fertility specialist are trading at an attractive level. Although competition has heated up in the industry, I think the strong underlying demand fundamentals for IVF and women's imaging services should allow the company to grow earnings at a reasonably strong rate over the next decade. At a little over 14x annualised earnings and providing a trailing fully franked 4.7% dividend, Monash IVF could be worth considering.
ResMed Inc. (CHESS) (ASX: RMD)
Although the ResMed share price is up 10% so far this year, I feel confident that even at today's price the sleep treatment company could prove to be an outstanding buy and hold investment. With the sleep apnoea market expected to grow at a solid clip for at least the next few years, I believe ResMed will be able to continue generating above-average sales growth for some time. Thanks partly to the successful acquisition of the Brightree software business, ResMed recently posted a 17% increase in sales to US$530.4 million.
