Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

Ramsay Health Care Ltd (ASX:RHC) Shares – A Long-term Hold?

Ramsay Health Care Ltd (ASX: RHC) is one of Australia’s largest and most well-known healthcare companies. Should Ramsay shares be in your portfolio?

Ramsay Health Care was established in Sydney in 1964 by Paul Ramsay. Now with over 50 years of experience, the company operates 480 facilities across 11 countries, including Australia, France, the UK, Sweden and Norway. Ramsay Health Care employs 77,000 staff globally to treat 8.5 million patients.

You can read about their latest earnings report here.

Why I Like It

Ramsay Health Care has a lot of the traits that I look for in a good investment.

They have experience and a long track record to prove their performance capabilities. One of the financial indicators I always look at is the return on equity (ROE). Ramsay Health Care has maintained an ROE above 20% since 2015, showing quality and consistency.

Ramsay’s current dividend yield is 2.2%, with the company paying out 57% of its earnings. While they are able to make strong returns on incremental capital, this makes sense to me. Plenty of investors would expect a higher dividend payment, but if the company can make a 20% return on equity I’m happy for them to invest the money for me.

One of the negatives for me is their level of debt. The current debt-to-equity ratio is 161.5%, with an interest cover of 7.6 times.

Looking at past returns, Ramsay Health Care struggled last year, and in October the share price was sitting at levels last seen in 2016. Since the low point in October, the share price has rebounded 24%.

Despite some weaker performances in recent years, over a 10-year period, Ramsay Health Care has returned 23.6% per year.

Should You Buy It?

The current question with Ramsay Health Care is whether their acquisition of European private healthcare business Capio will pay off. If the acquisition allows them to lower costs and increase revenue, it could be a great long-term move for the company. At the moment, it’s too early to say if this is the case.

Ramsay Health Care recently released investor presentations for parts of Europe showing that they are becoming a leading healthcare company in France and seeing growth in Sweden and Denmark.

Although I’m positive about this company, I’m not a shareholder. I don’t believe their growth justifies the current share price. However, if another buying opportunity arose, like the one in October 2018, I would consider adding Ramsay Health Care to my portfolio for a long-term investment.

[ls_content_block id=”14947″ para=”paragraphs”]

Disclaimer: At the time of writing, Max does not own shares in Ramsay Health Care Ltd.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Skip to content