There are some so-called tailwinds that don't really mean much, but the ageing population tailwind could be a really good one.
One of the industries that could be the biggest beneficiaries is the healthcare industry, particularly private hospital operators.
Here's why I think Healthscope Ltd (ASX: HSO) is a good choice for my portfolio:
Ageing population
Like I just mentioned, Healthscope is a clear beneficiary from the ageing population.
The over-65 segment of the population is sadly the most likely to need to visit a hospital.
The number of people over 65 is expected to grow by 75% over the next two decades, which suggests Healthscope's hospitals are just going to get busier from here.
Hospital construction and expansion
One of the main reasons I think Healthscope could be a market-beating opportunity is that it has an impressive list of projects which will increase the number of hospital beds and operating theatres.
Management have outlined that by FY19 it will have added another 566 hospital beds and 38 operating theatres, which should be a good boost to the bottom and top lines when all of them are complete.
Public hospital
One interesting aspect about Healthscope is that its large Northern Beaches Hospital project will be a public and private hospital.
Healthscope has been contracted by the New South Wales Government to design, build, operate and maintain the hospital. Healthscope has long-term contracts to operate it, the public contract is for 20 years and the private contract is for 40 years.
The catchment area has around 250,000 people with a private health insurance participation rate of more than 60%, which is significantly higher than the national average.
Foolish takeaway
Healthscope is currently trading at 19x FY18's estimated earnings with an unfranked dividend yield of 3.59%. Although $1.95 isn't as good of a price as $1.65 a couple of months ago, I think Healthscope could be a solid investment today.
