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5 ways to profit from Australia’s ageing population

There’s been a bit of back-and-forth in the media recently about the concentration of the nation’s wealth (especially property) in the hands of older generations – namely, the baby boomers. I haven’t got any stake in that debate, but I think one key way investors could benefit is to own shares in companies that sell stuff to the people with the greater material wealth.

If we’re talking about baby boomers, there are 3 key demands that this group of customers want met – health, wealth, and happiness.

Health:

Consider hearing aid manufacturer Cochlear Limited (ASX: COH). Not only does the company make money on the initial sale, it earns repeat business from maintenance and upgrades to those products. Plus, hearing difficulties are reportedly widely under-diagnosed and treated.

Healthscope Ltd (ASX: HSO) is a private hospital operator expected to benefit from the ageing population over time. With more hospitals currently under construction and tailwinds from an ageing and overweight citizenry (think more illness and more procedures), Healthscope could be in a good spot.

Japara Healthcare Ltd’s (ASX: JHC) aged care homes provide homes and care for individuals with both simple and complex healthcare needs, including dementia. Another one to benefit both from the ageing population and growing demand for aged care facilities.

Wealth

Class Ltd (ASX: CL1) provides software for self-managed super funds, and is growing its market share. The size of the market (the number of people using SMSFs) is also increasing.

Challenger Ltd (ASX: CGF) provides annuities and life insurance to retirees, and its update today suggest business is already booming.

Happiness

I haven’t come across any stocks that specifically target retiree/ baby boomer happiness, although judging by the 80 year olds that like to jump out of aeroplanes for their birthday, Skydive the Beach Group Ltd (ASX: SKB) could be a winner.

On a more serious note, some businesses like Lifestyle Communities Limited (ASX: LIC) and Gateway Lifestyle Group (ASX: GTY), which provide retirement accommodation, neatly straddle the wealth/happiness category, given how important affordable and comfortable homes are.

There's also The Motley Fool's latest stock picks for 2017, which offer strong opportunities at today's prices, in my opinion:

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Motley Fool contributor Sean O'Neill has no position in any stocks mentioned. The Motley Fool Australia owns shares of Challenger Limited and Class Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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