Australia passed the population milestone of 24 million this year, but if the best estimates are to believed, that is nowhere near where we will be in less than 40 years.
The federal government is keenly aware of the coming challenge, with initiatives like the recently announced “Smart Cities” package there to meet the challenge of the rapid growth in the population of our urban centres, where most of the population lives.
In fact, the government is working on the assumption that there will be around 40 million Australians living here by 2055. While this will place huge stresses on the federal budget, infrastructure and health system, it will also mean fantastic opportunities for companies of all sizes.
These ASX listed companies are best poised to benefit for two reasons: they are positively leveraged to a growing population, and they are unlikely to disappear in the next few decades.
The (population) growth portfolio
With over 16 million more Australians living in the country, one of the most fundamental needs must be met: housing. Unfortunately, housing developers and builders are not the most stable companies, and may not pass the longevity test.
Brickworks Limited (ASX: BKW) however, is a far safer exposure to the need for new dwellings. With a history stretching back to 1934, and conservative management, Brickworks should be around for the long haul. The company is one of the foremost providers of building products in the nation, including bricks, concrete panelling, roof tiles and pavers.
Of course, with housing, comes the need for a mortgage to purchase said house, and the Big 4 banks are the best placed to service that need. As the bank with the largest share of residential mortgages, Commonwealth Bank of Australia (ASX: CBA) is arguably the best exposure to this theme.
In addition, Commonwealth Bank is proactive with its technology and systems investment, meaning that it is likelier to attract and retain customers than its big bank peers as banking becomes increasingly tech focussed.
Unless our standard of living changes dramatically, chances are that Australians in 2055 will be as fond of travel as their peers in 2016. As our nation’s busiest airport, serving our largest population centre, Sydney Airport Holdings Ltd (ASX: SYD) is well placed to benefit. There will likely be a second Sydney Airport at some stage in that time frame, but the company holds the right of first refusal over that development, meaning it could own and operate both airports.
Finally, more Australians means more demand for high quality health care, and as the nation’s largest hospital operator Ramsay Health Care Limited (ASX: RHC) is the most strongly positioned to serve that demand.
Ramsay will also gain more domestic growth opportunities as state governments look to pursue public-private partnership models to run hospitals in an effort to control the ballooning cost of delivering health care.
As investors, we have a tendency to overcomplicate our decisions about what stocks to buy, but if you are a true buy and hold investor, then taking a long-term view makes it much simpler to identify those stocks that can deliver above market returns over years, not months.
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Motley Fool contributor Ry Padarath has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.