CSL vs RMD: Which ASX Healthcare Stock Is Better?

CSL Limited (ASX: CSL) and ResMed Inc. (ASX: RMD) operate in different healthcare segments. CSL specialises in plasma-derived therapies, vaccines and treatments for serious diseases, while ResMed focuses on sleep and respiratory health products.

Both companies offer growth opportunities, but their FY2026 financial results reveal differences in revenue growth, profitability and valuation.

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1. Financial Performance

CSL Limited (ASX: CSL)

CSL reported modest revenue growth in FY2026, while underlying profitability declined.

Key financial highlights:

• Revenue: US$15.8 billion, up approximately 1.5% year-on-year.

• Underlying NPAT: Fell 3% to US$2.80 billion.

• Underlying NPATA: Declined 2% to US$3.1 billion.

• Gross margin: Decreased to 53.5% from 54.3% in FY2025.

• Reported net result: A loss of US$2.58 billion, primarily due to significant restructuring and impairment charges.

Despite the reported loss, CSL remained profitable on an underlying basis. Its challenge is to improve earnings growth and manage the costs associated with its restructuring programme.

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ResMed Inc. (ASX: RMD)

ResMed delivered stronger financial growth in FY2026, supported by demand for its sleep and respiratory health products.

Key financial highlights:

• Revenue: Increased 9.9% to US$5.65 billion.

• Gross margin: Improved to 61.1% from 59.4%.

• Net income: Rose 8.7% to US$1.52 billion.

• Operating cash flow: Reached approximately US$1.8 billion.

ResMed's higher revenue growth and expanding gross margin indicate improved financial performance during the year.

2. Growth Drivers and Key Risks

CSL: Growth Outlook

CSL's future growth could be supported by:

• Demand for plasma-derived therapies.

• Newer treatments, including ANDEMBRY and HEMGENIX.

• Cost savings from its restructuring programme.

• Management's expectation of approximately 5% underlying NPAT growth in FY2027.

Key risks: Execution challenges related to restructuring, increased competition and potential revenue pressure at CSL Vifor could affect future earnings.

ResMed: Growth Outlook

ResMed's growth prospects are supported by:

• Increasing awareness and diagnosis of sleep apnoea.

• Demand for CPAP devices and masks.

• Expansion of connected healthcare solutions.

• Improvements in operational efficiency and margins.

Key risks: Competition, foreign exchange movements and product-related issues remain important considerations. The Astral safety issue has forced the company to suspend sales of affected products, with an expected FY2027 revenue impact of approximately US$75 million.

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3. Valuation Comparison

ResMed trades at a forward P/E ratio of 18.94, compared with 20.27 for CSL. Based on these figures, ResMed has the lower valuation relative to forecast earnings.

CSL, however, offers a higher dividend yield and a lower price-to-book ratio.

• Forward P/E: CSL 20.27 vs ResMed 18.94.

• Trailing price-to-book ratio: CSL 4.14 vs ResMed 5.18.

• Dividend yield: CSL 2.19% vs ResMed 0.73%.

• Market capitalisation: CSL approximately A$88.58 billion vs ResMed A$47.22 billion.

ResMed's lower forward P/E may appeal to growth-focused investors, while CSL's higher dividend yield may attract those prioritising income. These metrics should be assessed alongside earnings forecasts, cash flow and current share prices.

4. CSL vs RMD: Which ASX Healthcare Stock Is Better?

ResMed appears to have the stronger medium-term growth profile based on the supplied figures. Its FY2026 results showed faster revenue growth, higher net income growth and improving gross margins. Its lower forward P/E also makes it comparatively attractive on this valuation measure.

However, the expected revenue impact from the Astral safety issue remains a near-term concern.

CSL offers exposure to specialised biopharmaceuticals and a higher dividend yield. However, declining underlying earnings and restructuring-related challenges could weigh on its near-term performance.

Overall, ResMed may appeal more to investors seeking earnings growth, while CSL may suit investors looking for healthcare exposure with a higher dividend yield. The better choice ultimately depends on valuation, risk tolerance and investment horizon.

Source: Company announcements.