Investing in the Aging Population: Key Stock Picks
The demographic shift towards an older population presents significant opportunities for investors. A recent analysis by Mizuho highlights that as life expectancy increases and fertility rates drop, those aged 75 and older will significantly boost their spending power. This age group is expected to nearly double their expenditures over the next five years, increasing from $900 billion today to approximately $2.2 trillion by 2035.
Understanding the Spending Shift
With older Americans spending more in categories such as healthcare and housing, companies that cater to their needs are likely to benefit greatly. Mizuho’s analysis suggests that shifts in spending habits due to aging demographics will have a profound impact across various sectors. Analyst teams have identified several stocks that are well-positioned to succeed in this evolving landscape.
Top Stock Recommendations
1. Encompass Health (EHC)
As healthcare costs rise with an aging populace, Encompass Health is poised to be a leader in the rehabilitation sector. With many seniors experiencing complex medical conditions, the demand for inpatient rehabilitation centers is anticipated to grow. Mizuho’s analyst Ann Hynes has set a price target of $105 for Encompass Health, indicating a potential upside of 6% from current levels.
2. Glaukos (GKOS)
Focusing on the increasing prevalence of glaucoma among the elderly, Glaukos specializes in innovative treatments for this condition. Analyst Anthony Petrone forecasts that the market for glaucoma implants in the U.S. will rise from $1.2 billion in 2025 to $1.9 billion by 2035, largely driven by aging demographics. The price target for Glaukos has been set at $200, suggesting a notable 98% upside potential.
3. Home Depot (HD)
Many seniors prefer to age in place, often leading to a rise in home improvement needs. Home Depot, as noted by analyst David Bellinger, is expected to benefit from this trend. With a projected growth in older housing stock, renovations and maintenance will likely surge. Bellinger has a price target of $450, reflecting a 27% upside opportunity.
4. Welltower (WELL) and Ventas (VTR)
As the demand for senior housing rises, real estate investment trusts (REITs) like Welltower and Ventas are becoming increasingly attractive. Analyzing the market conditions, Vikram Malhotra indicates that Welltower, favored for its operational efficiency, has a price target raised to $170—implying a 14% upside—while Ventas’s target has increased to $75, suggesting an 11% upside.
5. DoorDash (DASH)
The trend towards online services continues to grow, particularly among older adults who may face mobility challenges. DoorDash is positioned well in the food delivery space, with analyst James Lee noting a target price of $222, indicating a potential increase of 16% from its current position.
6. Simply Good Foods (SMPL)
With the active nutrition market still underpenetrated among older consumers, Simply Good Foods stands to gain by targeting this demographic with specialized products. Analyst John Baumgartner cites a price target of $45, suggesting a 35% potential increase.
Conclusion
As the population ages, the shifts in spending and consumer behavior will shape economic landscapes and offer promising investment opportunities. Companies that effectively serve the needs of elderly consumers are expected to thrive in the coming years. Investors should consider the categories highlighted in Mizuho’s analysis when looking for stocks with significant upside potential.
