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.
(A Top Pick Apr 28/20, Up 16%) They own 80 LTCs in BC and Ontario. SIA got hit by negative headlines during Covid (seniors died) and higher vacancy rates. This is transitory. Long-term, the number of seniors will double in 15 years in Canada and vacancies should decline. SIA has a solid balance sheet and…
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.
(A Top Pick May 6/15. Down 46.75%.) A very good defensive name in general. Probably got tarred with the same brush as healthcare. Still thinks this is a good company, but he left because the price volatility was too hard.
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%.
Seniors sucked a lot of people into the sector for a long time because it was a low wage sector. It seemed to all line up well but in actual fact you don’t actually want to move in there. For the last 8 years the interest rates supported them but now you have the theme…
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.
Best of them all in the senior living space. There are always issues either with property, regulation, demographics, over supply, or the pandemic. Drop may present a decent buying opportunity. Difficult to value, as it's a communal living space. He finds much easier investments elsewhere.
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.
A real health conglomerate. Vertically integrated. Inexpensive valuation, at less than 10x. Recent earnings moved the needle down. Market may have been disappointed on 2021 guidance. 12.5% free cashflow yield. An excellent opportunity. The vaccine rollout will be a major contributor to its financial success.
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.
Fractional shares to buy instead of playing the short squeeze of GameStop, AMC, etc. They make Invisiline. They have a lot going for it. Your teeth are always on display when you Zoom or appear on Instagram.
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.
Recent acquisition in Puerto Rico. Building out pharmacy benefit manager. Short-term volatility around commercial Medicaid. Very inexpensive. Decent growth. Less than 1 PEG ratio and visibility into that growth. Yield is 1.51%. (Analysts’ price target is $362.52)
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.
Stockchase Research Editor: Michael O'Reilly CI provides healthcare insurance and services in the US and 30 countries worldwide. They have over 170 million customers. It trades at 15x earnings, compared to the peer average of 23x. Its PEG ratio is 0.95 with earnings growth exceeding 27% this year. Earnings are expected to grow over 10%…
Humana Inc (HUM-N)
A for-profit American health insurance company that has over 13 million patients.
(A Top Pick Oct 28/19, Up 41%) He trimmed it but still owns it. He likes their focus on the Medicare segment of the healthcare space. A lot of the headline risk has gone following the election. There is a huge tailwind of new customers for them as people turn 65 in the US. There…
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.
He has been investing in this for almost three years now. They received Health Canada approval for a new brain stimulation medical device last fall. They are awaiting FDA approval in the US. It magnifies the result of physio-therapy for the brain and the technology is safe. It is a billion dollar business if it…
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.
(A Top Pick Mar 12/20, Up 34%) A great company. Pharma, medical technology and consumer products are its three divisions, so if one lags, the others pick up the slack. Has great cash flow and pays an increasing yield. They came out with a Covid vaccine quickly. Developing drugs is a risk, because it depends…
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.
This ETF has smashed it over the past 5 years. Medical devices are a hybrid of tech and healthcare, which he really likes. Problem is that market enthusiasm and growth are priced in here already (like the FAANGs). Take profits.