{"id":31379,"date":"2023-07-04T17:48:04","date_gmt":"2023-07-04T21:48:04","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/compound-your-wealth-with-resmed-nysermd\/"},"modified":"2023-07-04T17:48:07","modified_gmt":"2023-07-04T21:48:07","slug":"compound-your-wealth-with-resmed-nysermd","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=31379","title":{"rendered":"Compound Your Wealth With ResMed (NYSE:RMD)"},"content":{"rendered":"
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Introduction<\/h2>\n

I’ve been busy researching healthcare stocks after coming to the conclusion that I want to make healthcare the second-largest sector in my portfolio. In addition to buying more of the stocks that I own, I’m considering adding two new companies. One of them could be <\/span>ResMed Inc. (NYSE:RMD<\/span>)<\/strong>, a fascinating company that I have never publicly discussed.<\/span><\/p>\n

While the company isn’t the perfect dividend stock due to its 0.8% yield and subdued dividend growth, the company is a fundamentally-driven wealth compounder.<\/p>\n

It has top-tier products that cater to modern health issues. It also has a wide moat, a strong product ecosystem, and secular tailwinds providing high long-term growth.<\/p>\n

In this article, I will elaborate on all of this and explain why the RMD ticker is now a part of my watchlist.<\/p>\n

So, let’s get to it!<\/p>\n

Buying A Fast-Growing Healthcare Segment<\/span> <\/h2>\n

Whenever I buy companies, I want to buy assets that add value to the world – in addition to having a wide moat.<\/p>\n

This includes healthcare, a sector that I expect to benefit from decades of strong tailwinds. Obesity, an aging population, and our fight against illnesses that were hard to treat for decades are reasons I’m such a big fan of healthcare.<\/p>\n

One chart I cannot stop thinking about is the one below, which shows that life expectancy in the United States has fallen off a cliff. Not only has this chart gone sideways between the Great Financial Crisis and 2019, but it has taken a huge plunge after the pandemic.<\/p>\n

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Scientific American<\/span><\/p>\n<\/figcaption><\/figure>\n<\/p>\n

According to a report in Scientific American, this is mainly due to COVID, other causes, unintentional injuries, and heart disease.<\/p>\n

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Scientific American<\/span><\/p>\n<\/figcaption><\/figure>\n<\/p>\n

What I found interesting is that issues like heart disease continue to pressure the average life expectancy. However, another major takeaway is that healthcare efforts in other areas are causing life expectancy to improve. This includes pneumonia, respiratory diseases, Alzheimer’s, and Parkinson’s.<\/p>\n

This brings me to the star of this article.<\/p>\n

With a market cap of $32 billion, ResMed is one of the largest players in the Medical Instruments & Supplies industry.<\/p>\n

The company is a global leader in digital health and cloud-connected medical devices. ResMed focuses on designing innovative solutions to treat and manage chronic diseases, such as sleep apnea, chronic obstructive pulmonary disease (“COPD”), and other respiratory disorders. This also explains the company’s name.<\/p>\n

Essentially, the company’s products aim to improve the quality of life for patients, reduce the impact of chronic disease, and lower costs for consumers and healthcare systems. While this sounds a bit like an obvious sales pitch, these goals are very important and in high demand. Especially because demand for chronic disease is (unfortunately) rising, which often requires expensive treatments. Having tools to improve patients’ lives while reducing costs is the sweet spot in this industry.<\/p>\n

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ResMed Inc.<\/span><\/p>\n<\/figcaption><\/figure>\n<\/p>\n

As the overview above shows, the company operates two (major) business segments:<\/p>\n