CSL Ltd (ASX: CSL) Shares Up 4% in 2024: Should They Be on Your Radar?

2 min read | September 12, 2024 02:42 PM AEST | By Team Kalkine Media

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CSL Ltd (ASX: CSL) Shares Up 4% in 2024: Should They Be on Your Radar? — Image source: shutterstock

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CSL Ltd has seen its share price climb 4.0% since the beginning of 2024. As an ASX healthcare stock, this rise reflects the company’s ongoing commitment to developing innovative medicines that address critical health needs and contribute to improved patient outcomes.

CSL (ASX:CSL) is a global biotechnology leader with a focus on delivering life-saving treatments. It operates through three main divisions:

- CSL Behring: Specializes in blood plasma products and has been a cornerstone of CSL’s operations since its acquisition in 2004.

- CSL Seqirus: Provides flu-related products and pandemic response services, evolving from BioCSL and the Novartis flu business acquired in 2015.

- CSL Vifor: Concentrates on iron deficiency and nephrology (kidney care) products.

Known for its reliability and consistent dividend payments, CSL has built a strong reputation among investors. Many view CSL as a proxy for the growing healthcare sector, which continues to expand as global healthcare costs rise.

The Case for Healthcare Stocks

Investing in healthcare stocks like CSL can offer several advantages:

- Steady Revenue: Healthcare is considered essential spending, making its revenue relatively stable. During economic downturns, people typically prioritize healthcare expenses, which helps maintain consistent revenue streams. Historically, the healthcare sector performed well during the global financial crisis (GFC).

- Growth Potential: The US, a major player in global healthcare spending, is expected to see a 7% annual increase in healthcare profits from 2022 to 2027, reaching US$819 billion. Sub-sectors within healthcare, such as IT and data solutions, are forecasted to grow over 15% per year from 2024 to 2030.

- Ethical Investing: With growing interest in sustainable and ethical investing, sectors like healthcare, which provide essential public services, are well-positioned to attract investment. A recent Morgan Stanley survey indicated that over half of investors plan to increase their allocation to sustainable investments in 2024.

CSL Share Price Valuation

To gauge CSL's valuation, one method is to look at the dividend yield. Currently, CSL Ltd shares have a dividend yield of around 1.32%, compared to a 5-year average of 1.50%. This suggests that CSL shares are trading below their historical average dividend yield.

CSL Ltd has shown solid performance in 2024, bolstered by its strong position in the healthcare sector. With its steady revenue, growth prospects, and appeal to ethical investors, CSL remains a noteworthy company to watch in the evolving healthcare landscape.

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