The way we live is constantly changing. Who would have thought that iPhones and Fitbits would be part of our daily lives if you went back to 2005?
Australians are often one of the first nations to take on a new trend or technology, which is why I think the below two businesses are great ways to benefit from Australia's, and potentially the world's, changing habits:
Blackmores Limited (ASX: BKL)
Blackmores is one of Australia's largest vitamin and supplement providers with a market capitalisation of $2 billion.
It has a huge range of different products, with every type of supplement you could want to buy. Health conscious people will want the positive effects of taking them everyday which can turn them into repeat customers.
Blackmores is constantly bringing new products to the market, one of which is a baby formula product. In retrospect Blackmores hasn't chosen the best time to launch a baby formula product considering what's happening to other baby formula companies, but in the long term it could carve out a decent market share.
The key to growth for Blackmores will be its sales to other countries. In its FY16 annual report, it disclosed that Asia in-country sales were up 54%. I expect international sales will keep growing strongly as the Asian middle classes take on more western habits.
Blackmores is trading at 24.8x FY17's estimated earnings with a grossed up dividend yield of 5.15%.
NIB Holdings Limited (ASX: NHF)
NIB is one of Australia's largest private health insurance funds, it has a market capitalisation of $2 billion.
There is a growing trend among Australians to have extras cover which can help pay for ancillary services, particularly among young people. Considering NIB has a pretty high amount of extras cover policyholders, NIB is a big beneficiary of this.
Extras cover can be very profitable for health insurers because they are only paying out a certain percentage of the claims they receive compared to the premium, essentially guaranteed profit. Whereas hospital cover can be expensive for the health insurance fund when a large claim is lodged.
I also like that NIB can benefit from all health issues unlike Virtus Health Ltd (ASX: VRT) or Cochlear Limited (ASX: COH), so there's not as much of a chance of it becoming outdated.
NIB is trading at 19.3x FY17's estimated earnings with a grossed up dividend yield of 4.56%.
Foolish takeaway
Both of these businesses are good healthcare investment options, but I think NIB is the clear winner. There are a few potential problems with Blackmores in the short term whereas NIB is growing well and its shares have grown impressively over the past few years. For another stock with a fast growing share price and big dividend yield, you really should check out this share.
