One investment thematic which I think investors should have exposure to is ageing populations.
In Australia, for example, the number of people aged 65 and over is expected to increase by 75% within the next couple of decades.
This is likely to be a big win for a number of companies on the ASX. Three which I think are worth a closer look are listed below. Here’s why I like them:
Japara Healthcare Ltd (ASX: JHC)
Japara is one of the nation’s largest aged care providers and my favourite option in the aged care sector. While there are concerns that the company could be at risk of regulatory changes in the future, I believe its strong management team has the ability to navigate through this and deliver solid long-term profit growth. Another bonus is its dividend, which at the current share price Japara provides investors with a trailing partially franked 5.5% dividend.
Lifestyle Communities Limited (ASX: LIC)
Lifestyle Communities provides accommodation for working, semi-retired, and retired people over the age of 50 through its 15 sites in Victoria. I believe that demand for its properties will grow strongly over the next decade and I’m not alone. A note out of Goldman Sachs todays rates it as a buy with a $6.65 price target. The broker likes the company due to its superior self-funding business model, long-term track record, and significant organic growth potential.
Swift Networks Group Ltd (ASX: SW1)
While not an immediately obvious choice, I do think this entertainment and telecommunication services company could also benefit from ageing populations. Swift provides fully integrated solutions for the resources, hospitality, lifestyle village, and aged care accommodation sectors. I expect demand for its services from the aged care sector could grow strongly over the coming decade as more and more facilities come on-line. The company currently provides its services to Regis Healthcare Ltd (ASX: REG) amongst many others.
Motley Fool contributor James Mickleboro has no position in any of the 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.
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