As baby-boomers retire in large number, the healthcare industry is expected to grow sharply. Retirement homes and long-term care facilities are going to face higher demands. Healthcare is also a more defensive sector for those who are looking for a safer investment choice. It’s also a very diverse field including insurance, medical technology, and care among others. Here are our 12 top picks to take advantage of population trends and healthcare.
Baby-boomers are set to retire in large numbers in the next few years, and among them, 70% of those aged 65 and over will need some long-term care services. Are you ready to deal with the financial stress of long-term care? Here are some tips to better prepare yourself so that you can live stress-free your golden years.
Sienna Senor Living Inc (SIA-T)
They used to be mostly long-term care but is now in short term rentals and they are growing their retirement homes. As the population ages, the demand will grow even stronger. They also have Leisure World product which receives government funding, which gives them some stability.
Great company. They have some government-funded assets, but are also expanding more into the private pay. There is a lot of growth there. If you are a REIT investor, you want to have exposure to the seniors living space, because it is going to outperform any of the other REITs over the next cycle.
Brookdale Senior Living (BKD-N)
They are the largest owner and operator of senior living communities in the U.S.. A very good defensive name. John Stephenson says that any kind of movement up in the housing market or consumer confidence brings a level of increase into the facilities.
The largest senior living company in the US. Have about 1100 facilities. There is a lot of talk about splitting off their real estate and making the operating company a REIT. That could be a huge catalyst for them. You have the positive theme of aging demographics. Any kind of movement up in the housing…
Capital Senior Living (CSU-N)
They operate senior living communities and assisted living centers in the United States. 98% of their facilities are private pay. Their occupancy is close to 90%.
Has excellent demographics being a seniors’ home. Occupancy is close to 90%. Have been able to increase rates every year. They own 60% of the underlying real estate, and don’t have a lot of government pay business. 98% is private pay. Doesn’t pay out a dividend. Instead they reinvest their cash flow into the business,…
Chartwell Seniors Housing (CSH.UN-T)
This is the largest participant in the Canadian seniors housing sector. They also have a higher level of long term care facilities. The demographics play in their favor. Christine Poole says that the 75-year-plus population is expected to double in the 20 next years, and this would be a good play on that.
Bad news is costs elevated, more competitive pressure in retirement homes. Pricey. Balance sheet not perfect. Good news is decent growth rate, and good long-term area to be in. But much better value elsewhere. He’s trimmed to move into other areas. You have to buy things at the right price.
CVS Health Corp (CVS-N)
An American retail pharmacy and health care company. A great balance sheet and they pay a good yield. Earnings are improving as they do the right things.
Buy a call at $54 in January 17, 2020 or Jan. 15, 2021 at $55? Is the latter better for the extra year? And add a put to offset the cost? They've had a good run, though it has staggered a bit recently. To buy a two years out is more like a warrant. You'll…
Align Technology Inc (ALGN-Q)
They are a manufacturer in 3D digital scanners and a clear aligners used in orthodontics. This falls into the medical device category, which is a very attractive space. Their technology for braces for teeth appeals to mature individuals who wants something less conspicuous.
His investment team has been debating this for a year. He really likes the company. This has technology for braces for teeth, that is non-invasive, easy to apply, and you don’t have to be an orthodontist to apply the technology. They are growing very rapidly globally. It has a very large addressable market. It appeals…
Anthem Inc (ANTM-N)
This is an American health insurance company that is the largest for-profit managed health care company in the Blue Cross and Blue Shield Association. They are also part of Obama Care and Medicaid.
Great long term play on growing healthcare spending. They are a health care insurer. They work for Fed and state governments, for corporations and individuals and gets the best deal for their clients. Works under Blue Cross and Blue Shield brand in 14 states. Very cheap. Trades at 14 times next years earnings. (Analysts’ price…
Cigna Corp. (CI-N)
They are an American worldwide health services organization. Seniors over 65 pay three times more on healthcare than those under 65. This company could also benefit from the Affordable Care Act.
Do the benefits programs for a lot of small and medium sized businesses and individuals and will benefit from Obama care. It has traded off from fear that businesses would have to now insure all their employees.
Humana Inc (HUM-N)
A for-profit American health insurance company that has over 13 million patients.
Helius Medical Technologies (HSM-T)
A medical technology company that recently received Health Canada approval for a new brain stimulation medical device.They are going through FDA approval in the U.S.. If this gets approved, they will be a billion dollar business.
Makes a medical device called the PONS, which appears to dramatically improve the results of therapy for people with brain injuries. They are in an FDA 3rd round right now. Results will probably be out in Q3. If results are positive, the stock will multiply, if not the stock is going to get crushed.
Johnson & Johnson (JNJ-N)
A well known multinational medical devices, pharmaceutical and consumer packaged goods manufacturing company. It’s a conglomerate of consumer, medical devices and pharma divisions. They’ve recently reported strong earnings. A name you can’t really go wrong with.
One of the biggest companies in the world. Pharama and consumer products. They were hit with a multi-billion dollar law suit that their baby powder has chemicals in it rather than just talc.
iShares DJ Medical Devices E.T.F. (IHI-N)
iShares DJ Medical Devices E.T.F. (IHI-N): A well-diversified and global medical and health device E.T.F.. This is a good choice for those wanting to diversify away from big pharma with an overlay of healthcare technology, a growing field.
He likes medical devices – worldwide hospital spending, changing demographics. It has great tailwinds. They are less politically charged than drug prices.