Investment Opportunities Arising from an Aging Population
The demographic shift towards an aging population represents a significant economic trend that is expected to influence market dynamics and provide growth opportunities for certain industries. A recent analysis by Mizuho highlights the impact this trend will have, particularly in sectors catering to older consumers.
Shifting Spending Paradigms
As longevity increases and fertility rates decline, the elderly will make up a larger segment of the population. American consumers aged 75 and older are projected to see their spending nearly double, leaping from $900 billion today to approximately $2.2 trillion by 2035, according to Mizuho’s findings. This demographic tends to allocate a larger share of their income toward essential services such as healthcare and rental housing. These changing spending patterns offer a glimpse into which sectors may thrive in the coming years.
Key Players to Watch
Mizuho has identified several companies positioned to benefit from these demographic shifts, focusing on those whose services align with the needs of an aging population:
- Encompass Health – Specializing in inpatient rehabilitation, Encompass Health is expected to profit from rising healthcare costs associated with elder care. Analyst Ann Hynes emphasizes its unique positioning in this market, with a price target of $105 reflecting anticipated growth.
- Glaukos – This medical technology company targets glaucoma treatment solutions. Analyst Anthony Petrone points out that the prevalence of glaucoma is set to rise significantly among older adults, positioning Glaukos favorably with a price target of $200, indicating nearly 98% upside potential.
- Home Depot – As seniors prefer to age in place, spending on home improvements is likely to rise. Analyst David Bellinger notes that Home Depot will benefit from increased demand for renovations, establishing a price target of $450, which implies a 27% upside.
- Welltower and Ventas – Both real estate investment trusts are well-placed to profit from rising demand for senior housing. Analyst Vikram Malhotra favors Welltower for its operational efficiency and strong balance sheet, raising its price target to $170, suggesting a 14% upside. Ventas also received a higher target of $75, indicating an 11% potential growth.
- DoorDash – With a trend towards increased online service consumption among the elderly, food delivery services like DoorDash stand to gain. Analyst James Lee sets a price target of $222, suggesting a 16% increase from current levels.
- Simply Good Foods – This company presents an intriguing opportunity in the active nutrition segment, as many older consumers are underrepresented in this market. Mizuho’s analyst John Baumgartner believes focused marketing could elevate their sales, setting a price target of $45 for a potential 35% upside.
Conclusion
The aging population presents a transformative opportunity for various sectors linked to healthcare, home improvement, and convenience services. Mizuho’s analysis sheds light on how investors can identify stocks that align with this demographic shift, offering pathways for potential growth in a changing economic landscape.
