Dec 2, 2024

I think these two stocks are healthy investment options. Posted by Tristan Harrison is one of the longest-serving writers at The Motley Fool Australia. Tristan has been contributing ASX news and stock analysis articles since 2016. His aim is to help Australians learn about great ASX shares, with a focus on ASX dividend shares and undervalued ASX growth shares. He holds an advanced diploma from the Association of Accounting Technicians and is enrolled in the Chartered Institute Management Accountant (CIMA) qualification program. Published Image source: Getty Images You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More The ASX healthcare stock CSL Ltd ( ASX: CSL ) is one of the most impressive businesses on the ASX with how it grew from a relatively small business into the global giant it is today. However, long-term shareholders may find themselves significantly allocated to the business because of its share price growth over the years. What are investors supposed to do about that? I can understand if shareholders want to stay invested, but perhaps gaining exposure to the ASX healthcare sector through additional businesses could be a good diversification strategy. I'm going to talk about two businesses that offer generalised exposure to the healthcare sector, rather than being focused on one medical condition or one type of treatment. Sonic Healthcare is a pathology business with global operations. It has a presence in countries like Australia, New Zealand, the UK, Germany, Switzerland and the USA. It provides an essential part of the healthcare journey so that patients can get the right treatment. I believe this business offers defensive earnings because demand is always there – people continue to get sick regardless of what's going on with the economy. Indeed, long-term demand is increasing in those countries with growing and ageing populations. This is helping drive Sonic Healthcare's organic revenue. The ASX healthcare stock is also regularly making acquisitions to boost its presence and scale. European acquisitions have been a focus in the last couple of years. Sonic Healthcare is investing money and effort into artificial intelligence, which could help it lower costs and serve customers. I think the long-term looks very promising for this business, if its revenue and margins increase.