There’s no escaping from the fact that populations around the world are getting older.
According to the United Nations, in 2017 the global population aged 60 years or over numbered 962 million. This was more than double the 382 million over 60s worldwide in 1980.
This trend is expected to continue long into the future, with the United Nations estimating that the global population aged 60 years or over will more than double to 2.1 billion by 2050.
Combined with increasing chronic disease burden, I expect this to lead to growing demand for healthcare services over the next couple of decades.
In light of this, I think these healthcare shares could be great long-term investment options:
Cochlear Limited (ASX: COH)
Cochlear is one of the world’s leading hearing solutions companies. It has a long track record of delivering strong earnings growth and returns for shareholders. I believe this trend will continue for a long time to come thanks to the ageing populations tailwind. In FY 2020 management expects to deliver net profit in the range of $290 million to $300 million. This represents a 9% to 13% increase on FY 2019’s underlying net profit.
CSL Limited (ASX: CSL)
Another healthcare share which I think would be a great long term option is CSL. It is the leading biotherapeutics companies behind the CSL Behring and Seqirus businesses. CSL Behring is the global leader in plasma therapies and Seqirus is the second biggest influenza vaccines company globally. I expect both companies to benefit from ageing populations and drive strong earnings growth over the next decade.
Japara Healthcare Ltd (ASX: JHC)
I’ve been very underwhelmed with this aged care provider’s performance over the last few years. And although I’m not expecting an improvement in its performance in the near term, I feel that the long-term tailwinds from Australia’s ageing population could make it a winner over the next decade. This could make it worth considering a small investment in its shares in 2020. Though, it might be best waiting for occupancy levels to start improving again before picking up shares.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and CSL Ltd. The Motley Fool Australia has recommended Cochlear Ltd. 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 Scott Phillips.