Resmed should continue to deliver 10% EPS growth per year over the next 2 – 3 years.
However, at 27x F19 earnings and 1.5% yield, the stock looks expensive.
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Other names within the Healthcare space such as CSL at 32x and COH at 38x FY19 also, look expensive.
With the above in mind, our base case is that the sector trades sideways and investors should add a covered call option to enhance the returns.
Resmed
