Over the last five years the benchmark S&P/ASX 200 index has carved out a gain of around 17% excluding dividends. Including dividends the total return stretches to in excess of 43%.
Whilst this is undoubtedly a solid gain, it pales in comparison to the gain that was made by the healthcare sector over the same period.
During this time the S&P/ASX 200 Health Care index has pushed a massive 113% higher.
Whilst I don’t expect this level of outperformance to continue over the next five years, due to the high quality on offer in the sector and positive tailwinds, I believe it could still generate above-average returns for investors.
With that in mind, here are three healthcare shares I would buy today:
CSL Limited (ASX: CSL)
This global biotherapeutics company has a long track record of generating strong returns for its shareholders. Thanks to the quality of its portfolio, pipeline of lucrative drugs, growing plasma collection network, and significant investment in research and development, I believe it is well-positioned to continue this strong form for many years to come.
ResMed Inc (ASX: RMD)
This sleep treatment-focused medical device company is another which I believe could provide above-average returns for investors over the next decade. This is due to the quality of its portfolio of cloud-connected devices which care for people with sleep apnoea, chronic obstructive pulmonary disease, and other chronic diseases.
Telix Pharmaceuticals Ltd (ASX: TLX)
If you’re interested in small cap shares then Telix Pharmaceuticals could be worth a closer look. It is a clinical-stage biopharmaceutical company focused on the development of diagnostic and therapeutic products based on targeted radiopharmaceuticals or molecularly-targeted radiation. At present Telix is developing a portfolio of clinical-stage oncology products that address significant unmet medical need in renal, prostate, and brain cancer.
As well as CSL, ResMed, and Telix, I think these top blue chip shares could provide strong returns for shareholders over the coming years.
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James Mickleboro owns shares of TELIXPHARM DEF SET. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has recommended ResMed Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019