2 chances to make a million?

Investing in the FTSE 100
Investing in the FTSE 100

The healthcare sector could prove to be a shrewd place to invest for the long term. Certainly, it may not help you to make a million overnight, but there appear to be a number of potential growth opportunities within the industry. Their outlooks are enhanced by a growing and ageing world population. Therefore, it seems likely that demand for a range of healthcare treatments will increase in the future.

With that in mind, here are two healthcare companies that could be worth buying right now.

Encouraging progress

Reporting on Thursday was surgical and advanced wound care specialist Advanced Medical Solutions(LSE: AMS). The company reported that it is making good progress in the year to 31 December. It expects revenue and profitability to be in line with expectations that include the positive impact from the recent Organogenesis licensing deal. Its Research and Development activities continue to provide both product innovation and intellectual property, which means that the company is well placed to continue on its current growth trajectory.

In the current year, Advanced Medical Solutions is forecast to record a rise in its bottom line of 19%. It is due to follow this up with a rise in earnings of 7% next year. With it trading on a price-to-earnings growth (PEG) ratio of just 1.9, it appears to offer good value for money given its upbeat growth outlook.

Clearly, the company has delivered strong growth in the last year. Its share price has risen 55% since the start of 2017. However, investor sentiment may remain robust, since the stock offers a mix of low positive correlation with the wider economy as well as a reasonable valuation. As such, now could be a good time to buy it for the long run.

Solid progress

Also offering an upbeat outlook for its investors is advanced wound management and surgical devices specialist Smith & Nephew(LSE: SN). The company has a good track record of earnings growth, with its bottom line rising in four of the last five years. This shows that it could have strong defensive characteristics and may be a worthwhile holding during the current period of uncertainty regarding the UK's economic outlook.

Looking ahead, Smith & Nephew is expected to record a rise in its bottom line of 8%, followed by additional growth of 6% next year. Although it trades on a relatively high price-to-earnings (P/E) ratio of 19.5, it does not appear to be overvalued based on its historic ratings. Therefore, there could even be scope for a greater premium over the wider index as a result of its mix of growth and defensive characteristics.

With dividends forecast to rise by 6.7% and being covered 2.6 times by profit, the company could become an increasingly attractive income play. As such, while it has a dividend yield of only 2%, now could be the right time to buy it for the long run.

Making a million

Of course, finding stocks that are worth adding to your portfolio is a tough task, which is why the analysts at The Motley Fool have written a free and without obligation guide called 10 Steps To Making A Million In The Market.

It's a simple and straightforward guide that could make a real difference to your portfolio returns. It could help you to find the stocks most likely to make you a millionaire.

Click here to get your copy of the guide - it's completely free and comes without any obligation.

Peter Stephens owns shares in Advanced Medical Solutions. The Motley Fool UK has recommended Advanced Medical Solutions. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.