If you're looking to make an investment in the Australian share market, then I think CSL Limited (ASX: CSL) shares would be a great option.
Three key reasons that I rate the company highly are listed below:
Australia's highest quality business?
The first reason to consider buying CSL is its quality. In fact, I would argue that the biotherapeutics giant is Australia's highest quality business. It is made up of two businesses – CSL Behring and Seqirus. CSL Behring is a global biotechnology leader which offers the broadest range of quality plasma-derived and recombinant therapies in the industry. Whereas Seqirus is one of the world's leading vaccines developers with a focus on influenza. It is also supporting the efforts to develop and manufacture a COVID-19 vaccine. Combined, I believe these two businesses have positioned CSL perfectly for growth over the long term.
Attractive valuation.
Although the CSL share price has recovered from its lows, it is still trading some distance from its 52-week high. I think this has left its shares trading at an attractive level for a long-term focused investor. And while the pandemic is having a negative impact on its plasma collections, which are a key ingredient to its immunoglobulin products, I'm optimistic that this will be partly offset by increased demand for seasonal flu vaccines because of the pandemic. This could make now an opportune time to pick up shares.
Research and development pipeline.
Did you know that every year CSL invests approximately 10% to 11% of its sales into research and development (R&D) activities? So, with sales revenue in FY 2020 hitting US$8,797 million, the company is now investing almost US$1 billion each year into its R&D. This high level of investment ensures that the company has some of the most talented scientists in the industry working for it. It also means that its R&D pipeline is filled to the brim with therapies and vaccines that have the potential to generate significant revenues in the future.
Foolish Takeaway.
The CSL share price has smashed the market over the last 10 years. Due to the three reasons listed above, I'm confident it will do the same again over the next decade.
In light of this, I would class CSL shares as a strong buy.
