The healthcare sector is large and complex. Australian investors must be wary of governmental regulations and political shifts before investing in healthcare stocks.
What are healthcare stocks?
Healthcare stocks belong to the healthcare sector of the stock market — one of 11 sectors defined by the Global Industry Classification Standard. Companies within the healthcare sector provide medical services, including insurance, medical equipment and pharmaceuticals.
The healthcare sector is large, with healthcare-related spending accounting for approximately 10% of Australia's GDP in 2018. The healthcare sector is also complex, given government and professional licensing regulations, research costs and the rapid evolution of the medical field.
What subcategories does it include?
The healthcare sector can be further divided into the following major industries:
Healthcare facilities. These include hospitals, clinics, laboratories, mental health facilities and nursing homes.
Health insurance. Companies responsible for providing and underwriting health insurance policies also belong to the healthcare sector.
Medical equipment. Medical equipment providers design and manufacture equipment used across the sector, from CT scanners to surgical gloves.
Pharmaceuticals.Biotech firms and major pharmaceutical firms work to research, develop and distribute generic and name-brand drugs.
How to invest in the healthcare sector
There are two ways to invest in the healthcare sector in Australia: individual stocks or exchange-traded funds (ETFs). Individual stocks offer targeted investment opportunities but have limited market exposure. Sector-tracking ETFs are more diverse and less risky than individual stocks but are accompanied by expense ratios.
Before you can invest, you’ll need a brokerage account in Australia. Here’s how the investment process works:
Pick a platform.Online brokerages in Australia are plentiful, so conduct your own research to find the platform best suited to your investment goals.
Open an account. If you opt for a web-based brokerage account, you can complete the application process online.
Fund your account. Before you can purchase securities, fund your account with an external transfer.
Select your securities. Search for stocks and ETFs by sector using your platform’s research tools.
Place an order. Once you’ve found a security you’d like to purchase, indicate how many you’d like to buy and submit your order.
Monitor your investments. Log in to your brokerage account to track your investments.
What stocks are in the healthcare sector?
Company summary
CSL Limited researches, develops, manufactures, markets, and distributes biopharmaceutical and vaccines in Australia, the United States, Germany, the United Kingdom, Switzerland, China, and internationally. The company operates through CSL Behring, CSL Seqirus, and CSL Vifor segments. The CSL Behring segment offers plasma products, gene therapies, and recombinants. The CSL Seqirus segment provides influenza related products and pandemic services to governments. The CSL Vifor segment offers products in the therapeutic areas of iron deficiency and nephrology. The company also licenses CSL intellectual property. CSL Limited was founded in 1916 and is headquartered in Melbourne, Australia.
Fisher & Paykel Healthcare Corporation Limited, together with its subsidiaries, designs, manufactures, markets, and sells medical device products and systems worldwide. It also provides its products for use in acute and chronic respiratory care, and surgery, as well as the treatment of obstructive sleep apnea (OSA) in the home and hospital. The company offers adult respiratory products, including optiflow nasal high flow therapy, invasive ventilation, and noninvasive ventilation. In addition, it provides infant respiratory products, such as resuscitation, invasive ventilation, continuous positive airway pressure (CPAP) therapy, and nasal high flow therapy products. Further, the company offers hospital products, including humidification products, breathing circuits, chambers, masks, nasal cannulas, surgical, accessories, and interfaces; and homecare products that include masks, CPAP devices, software and data management products, humidifiers, and accessories. Fisher & Paykel Healthcare Corporation Limited was founded in 1934 and is headquartered in Auckland, New Zealand.
Sonic Healthcare Limited offers medical diagnostic services to medical practitioners, hospitals, community health services, and their collective patients. The company provides laboratory medicine/pathology testing services, such as biochemistry, cytopathology, genetics, haematology, histopathology, immunoserology, microbiology, molecular pathology, prenatal testing, toxicology, and ancillary functions; and radiology services, including magnetic resonance imaging, computed tomography (CT), ultrasound, X-ray, mammography, nuclear medicine, PET CT, interventional procedures, and bone mineral densitometry. It offers primary care medical services comprising general practice clinics, occupational health services, skin cancer clinics, after-hours general practice services, general practice IT solutions, and community-based healthcare services. The company operates in Australia, the United Kingdom, Ireland, the United States, Germany, Switzerland, New Zealand, Belgium, and internationally. Sonic Healthcare Limited was incorporated in 1934 and is headquartered in Sydney, Australia.
Ramsay Health Care Limited owns and operates hospitals. The company offers health care services to public and private patients. It operates facilities in approximately 530 locations in the Asia Pacific, the United Kingdom, France, and Nordics. Ramsay Health Care Limited was founded in 1964 and is based in Sydney, Australia.
Cochlear Limited provides implantable hearing solutions for children and adults worldwide. It offers cochlear implant systems, sound processor upgrades, bone conduction systems, accessories, and other products. Cochlear Limited was founded in 1981 and is headquartered in Sydney, Australia.
ResMed Inc. develops, manufactures, distributes, and markets medical devices and cloud-based software applications for the healthcare markets. It operates in two segments, Sleep and Respiratory Care, and Software as a Service. It offers various products and solutions for a range of respiratory disorders, including technologies to be applied in medical and consumer products, ventilation devices, diagnostic products, mask systems for use in the hospital and home, headgear and other accessories, dental devices, and cloud-based software informatics solutions to manage patient outcomes, as well as provides customer and business processes. The company also provides AirView, a cloud-based system that enables remote monitoring and changing of patients' device settings; myAir, a personalized therapy management application for patients with sleep apnea that provides support, education, and troubleshooting tools for increased patient engagement and improved compliance; U-Sleep, a compliance monitoring solution that enables home medical equipment (HME) to streamline their sleep programs; connectivity module and propeller solutions; and Propeller portal. It offers out-of-hospital software solution, such as Brightree business management software and service solutions to providers of HME, pharmacy, home infusion, orthotics, and prosthetics services; MatrixCare care management and related ancillary solutions to senior living, skilled nursing, life plan communities, home health, home care, and hospice organizations, as well as related accountable care organizations; HEALTHCAREfirst that offers electronic health record, software, billing and coding services, and analytics for home health and hospice agencies; and MEDIFOX DAN's software solutions. The company markets its products to sleep clinics, home healthcare dealers, and hospitals through a network of distributors and direct sales force. The company was founded in 1989 and is headquartered in San Diego, California.
Ansell Limited designs, develops, and manufactures protection solutions in the Asia Pacific, Europe, the Middle East, Africa, Latin America, the Caribbean, and North America. It operates in two segments, Healthcare and Industrial. The Healthcare segment manufactures and markets solutions comprising surgical gloves, single use and examination gloves, and clean and sterile gloves and garments, as well as consumables used by hospitals, surgical centers, dental practices, veterinary clinics, first responders, manufacturers, auto repair shops, chemical plants, laboratories, and life sciences and pharmaceutical companies. The Industrial segment manufactures and markets hand and chemical protective clothing solutions for a range of industrial applications, including automotive, chemical, metal fabrication, machinery and equipment, food, construction, mining, oil and gas, utilities, logistics, and first responders. The company was formerly known as Pacific Dunlop Limited and changed its name to Ansell Limited in 2002. Ansell Limited was founded in 1893 and is based in Richmond, Australia.
Pro Medicus Limited engages in the development and supply of healthcare imaging software and services to hospitals, diagnostic imaging groups, and other related health entities in Australia, North America, and Europe. The company offers Visage radiology information systems (RIS), a proprietary medical software for practice management, training, installation, professional services, and after-sale support and service products; and Promedicus.net, an e-health platform. It also provides healthcare imaging software that provides radiologists and clinicians with visualization capability for viewing 2-D, 3-D, and 4-D medical images, as well as picture archive and communication system (PACS)/digital imaging software; and integration products. In addition, the company offers Visage Ease Pro, a mobile application that provides users the ability to interpret various diagnostic imaging studies stored on a Visage 7 server. The company provides its products under the Visage RIS, Visage RIS/PACS, Visage 7, Visage Ease Pro, and Visage Ease names. Pro Medicus Limited was incorporated in 1983 and is headquartered in Richmond, Australia.
EBOS Group Limited engages in the marketing, wholesale, and distribution of healthcare, medical, pharmaceutical, and animal care products in Australia, New Zealand, and Southeast Asia. It operates through Healthcare and Animal Care segments. The company provides healthcare logistics; medication management solutions; pharmacy management software; loyalty, generics, compliance, business intelligence, and store software services; and health communications, programs, and consultancy services. It also offers community based health care services and programs; vitamins, minerals and supplements, herbal and fruit teas, and natural toothpastes, as well as functional foods, including molasses and manuka honey; Pharmacy Choice, a five step integrated retail program for independent pharmacies; and healthSAVE, a community pharmacy banner that helps members drive their retail businesses. In addition, the company supplies health and wellness products to public and private hospitals, day surgeries, general practice, aged care facilities, specialist clinics, government, and non-profit health agencies, as well as clinically essential products; and provides pharmacy services to private and public hospitals, cancer centers, correctional facilities, and veterinary clinics. Further, it offers allografts solutions; healthcare distribution, warehousing, clinical trial management, and product registration services; clinical trial logistics; aesthetic healthcare devices, medical-grade cosmeceuticals, and injectables; and surgical devices and medical consumables. Additionally, the company provides pet nutrition, treats, clean-up, and grooming products and accessories; and wholesales veterinary products for companion animals, production animals, and equine athletes. The company was formerly known as Early Bros Dental & Surgical Supplies Ltd. and changed its name to EBOS Group Limited in 1986. EBOS Group Limited was incorporated in 1922 and is headquartered in Docklands, Australia.
Historical performance
Company summary
Summerset Group Holdings Limited, together with its subsidiaries, develops, owns, and operates integrated retirement villages in New Zealand and Australia. The company provides rest home care, hospital care, memory care, and respite and short-term care services; and facilities and activities, as well as villas, cottages, townhouses, apartments, serviced apartments, and care centers. The company was founded in 1997 and is headquartered in Wellington, New Zealand. Summerset Group Holdings Limited operates as a subsidiary of New Zealand Central Securities Depository Limited.
Historical performance
Stock information
Market capitalization: $2403262720
P/E ratio: 5.9649
PEG ratio: 0
Dividend yield: 0.0205%
Company summary
Healius Limited provides specialty diagnostic services to consumer and practitioners in Australia. The company operates through three segments: Pathology, Imaging, and Others. It offers diagnostic imaging services, private medical laboratory, and pathology services. It also provides cataract surgery, colonoscopy, gastroscopy, plastic and cosmetic surgery, skin cancer removal, IVF egg collection, and gynaecological surgery services under the Laverty Pathology, Dorevitch Pathology, QML Pathology, Western Diagnostic Pathology, Genomic Diagnostic, Vetpath Laboratory, Vetnostics, QML Vetnostics, TML Vetnostics, ASAP Laboratory, Abbott Pathology, TML Pathology, IQ, Pathology, Kossard, Gastrolab, and Agilex Biolabs; Lumus Imaging; and Montserrat brands. The company was formerly known as Primary Health Care Limited and changed its name to Healius Limited in December 2018. Healius Limited was incorporated in 1994 and is based in Sydney, Australia.
Nanosonics Limited, together with its subsidiaries, operates as an infection prevention company in Australia and internationally. The company manufactures and distributes the trophon ultrasound probe disinfector, and its related consumables and accessories, as well as research, develops, and commercialize of infection control and decontamination products and related technologies. Its product portfolio includes trophon2 that provides protection across various level disinfection HLD cycle; Nanosonics AuditPro, an infection control workflow compliance management; Trophon EPR for mitigating the risk of exposure to toxic chemicals; and CORIS, an instrument reprocessing product platform. Nanosonics Limited was incorporated in 2000 and is headquartered in Macquarie Park, Australia.
PolyNovo Limited develops medical devices in the United States, Australia, New Zealand, the United Kingdom, Ireland, Singapore, and internationally. The company offers NovoSorb Biodegradable Temporising Matrix, which is used in a fully debrided clean surgical wound to physiologically close the wound. It is also developing hernia devices for hernia repair and solution for ventral hernia and complex abdominal wall reconstruction; NovoSorb Dermal Beta Cell Implant to host pancreatic islet cells in the skin; NovoSorb MTX for the treatment of varying complex wounds; and plastics and reconstructive device product. The company was formerly known as Calzada Limited and changed its name to PolyNovo Limited in November 2014. PolyNovo Limited was incorporated in 1998 and is headquartered in Port Melbourne, Australia.
Mesoblast Limited engages in the development of regenerative medicine products in Australia, the United States, Singapore, and Switzerland. The company offers products in the areas of cardiovascular, spine orthopedic disorder, oncology, hematology, and immune-mediated and inflammatory diseases. Its proprietary regenerative medicine technology platform is based on specialized cells known as mesenchymal lineage cells. The company offers Remestemcel-L that is in Phase III clinical trials for the treatment of systemic inflammatory diseases, including steroid refractory acute graft versus host disease, acute respiratory distress syndrome, and biologic refractory inflammatory bowel disease; and Remestemcel-L, which is in Phase III clinical trials to treat chronic heart failure and chronic low back pain due to degenerative disc disease. It is also developing MPC-300-IV to treat biologic refractory rheumatoid arthritis diabetic nephropathy; and MPC-25-IC for the treatment or prevention of acute myocardial infarction. It has strategic partnerships with Tasly Pharmaceutical Group to offer MPC-150-IM for heart failure and MPC-25-IC for heart attacks in China; JCR Pharmaceuticals Co. Ltd. to treat wound healing in patients with epidermolysis bullosa; and Grünenthal to develops and commercializes cell therapy for the treatment of chronic low back pain. The company was incorporated in 2004 and is headquartered in Melbourne, Australia.
Telix Pharmaceuticals Limited, a commercial-stage biopharmaceutical company, focuses on the development and commercialization of diagnostic and therapeutic radiopharmaceuticals and related medical devices for cancer and rare diseases in Australia, Belgium, Japan, Switzerland, and the United States. Its lead products include TLX591-CDx for the diagnosis and treatment of metastatic castrate-resistant prostate cancer; TLX250-CDx that is in Phase III clinical trials for the treatment and diagnosis of renal (kidney) cancer; TLX101-CDx for the diagnosis and treatment of glioblastoma (brain cancer); TLX66-CDx to treat bone marrow conditioning and rare diseases; TLX300-CDx for the treatment and diagnosis of soft tissue sarcoma; TLX250, which is in Phase II clinical trials for the diagnosis and treatment of kidney cancer; TLX591, which is in Phase III clinical trials for the diagnosis and treatment of metastatic castrate-resistant prostate cancer; TLX101 that is in Phase II clinical trials for the treatment of glioblastoma (brain cancer); TLX66, which is in Phase II clinical trials for the treatment of bone marrow conditioning and rare diseases; and TLX300 that is in Phase I clinical trial for the treatment and diagnosis of soft tissue sarcoma. The company also develops TLX592, a prostate cancer therapy candidate for targeted alpha therapy; and TLX599-CDx for treatment of prostate cancer imaging agent. The company was founded in 2015 and is headquartered in North Melbourne, Australia.
Clinuvel Pharmaceuticals Limited, a biopharmaceutical company, focuses on developing and commercializing treatments for patients with genetic, metabolic, and life-threatening disorders in Australia, Europe, the United States, Switzerland, and internationally. Its lead drug candidate is SCENESSE, a systemic photoprotective drug for the prevention of phototoxicity in adult patients with erythropoietic protoporphyria (EPP). The company's pipeline products include CUV9900, an alpha-melanocyte stimulating hormone analogue; Parvysmelanotide (VLRX001), which provoke prolonged cellular activity; and PRÉNUMBRA, a liquid injectable formulation of afamelanotide. The company was founded in 1987 and is headquartered in Melbourne, Australia.
The graph below tracks the Health Care Select Sector SPDR Fund (XLV). Tracking ETF performance is one way to measure how the sector as a whole is doing.
Why invest in healthcare stocks?
Healthcare is a human necessity. This means the demand for healthcare services typically remains unchanged, regardless of how other industries rise and fall. Investing in well-established healthcare stocks can provide a cushion of security in an aggressive growth portfolio.
Healthcare stocks also offer Australian investors the opportunity to fund medical research. As the field continues to expand, investors can support research efforts seeking to cure disease.
What unique risks does the healthcare sector face?
The medical field is complicated, and if you don’t understand what a company does or how it operates, you may want to think twice before investing.
Government legislation is another major consideration for healthcare investors. Sweeping shifts in policy — the Affordable Care Act in the United States, for example — have the power to trigger significant volatility in this sector. And global drug approval authorities have the power to make or break fledgling pharmaceutical companies. If you choose to invest in this sector, keep an eye on political shifts and regulatory changes.
Compare stock trading platforms
To purchase stocks or ETFs, you'll need a brokerage account in Australia. Use this table to compare your options and find the right fit.
Important: The standard brokerage fee displayed is the trade cost for new customers to purchase $1,000 of either Australian or US shares. Where a platform charges different fees for both US and Australian shares we show the lower of the two. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.
Bottom line
The healthcare sector offers the opportunity for profit but carries its own unique set of risks. Whether or not this sector belongs in your portfolio depends on your risk tolerance and investment goals. Explore your brokerage account options across multiple trading platforms for the account best suited to your needs.
Frequently asked questions
A number of third-party research providers, including Bloomberg and Yahoo Finance, offer sector analytics to help investors stay on top of industry trends and price fluctuations.
Most trading platforms offer access to a stock screener — a research tool that enables you to filter stocks by sector.
Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades. Read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for the product on the provider's website.
Shannon Terrell is a writer for Finder who studied communications and English literature at the University of Toronto. On any given day, you can find her researching everything from equine financing and business loans to student debt refinancing and how to start a trust. She loves hot coffee, the smell of fresh books and discovering new ways to save her pennies.
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