Aging stocks (or longevity stocks) are drawing attention from investors for obvious reasons. The Baby Boomer generation is now almost fully retired, and Gen X is right on its heels. It is a profitable trend that’s not going away anytime soon.
There are many ways to invest in an aging population. An obvious choice is healthcare stocks. The advancements in medical technology allow individuals to enjoy a better quality of life for much longer.
Of course, as many Gen X and Millennial children can attest to, that brings its own challenges. How do you balance the desire to give elderly parents the independence they want with the medical care they may need?
But your concern as an investor is finding ways to hit the pitches thrown at us. That’s especially true when the pitch is right over the plate. Here are three aging stocks that offer different thematic approaches to profit from the opportunities that exist in an aging population.
Medtronic (MDT)
Medtronic (NYSE:MDT) is my first choice among aging stocks to consider in the healthcare sector. The steady growth in the medical device company’s stock was interrupted by the global pandemic in 2020. That wasn’t without reason. Medical treatments were canceled or delayed, which meant lower revenue and earnings for this industry leader.
But the sector normalization is clearly underway. That may not be reflected in the company’s earnings at the moment. However, Medtronic raised its guidance for 2024 when it last reported earnings in November 2023. Since then, MDT stock has been up over 20%.
Still, it’s trading right around the level it was at five years ago. That doesn’t seem to take into account the company’s forecast for over 5% earnings growth. Analysts have a consensus price target of about 5% above its closing price as of January 23.
But the reason many investors are drawn to Medtronic is for its dividend, which currently has a 3.20% yield. The company is a Dividend Aristocrat that has increased its dividend for 47 consecutive years.
CareTrust REIT (CTRE)
As a real estate investment trust (REIT), CareTrust REIT (NYSE:CTRE) isn’t a true healthcare stock. However, the company’s focus on long-term care facilities makes it the right choice as one of the aging stocks to buy in 2024.
CareTrust owns, acquires, develops and leases properties focused in the areas of skilled nursing, seniors housing and other healthcare-related properties. The company currently operates 206 properties in 25 states and is projecting earnings growth of 9.2% in the next 12 months.
Some analysts are concerned the company issued an equity offering in 2023 despite being in a healthy financial position. However, that is likely a sign the company plans to expand its footprint.
What might concern me more is that CTRE stock delivered stock price growth of about 12% in the last year. That’s about 3x the historical average. That being said, this is a relatively young stock having only been publicly trading since 2014.
Of course, a key reason that investors invest in REITs is a high-yield dividend. The CareTrust dividend yield at the time of this writing is 5.11%. The company has been increasing its dividend every year since 2014.
Acumen Pharmaceuticals (ABOS)
The last company on this list of aging stocks is a small-cap, clinical-stage biopharmaceutical company. Acumen Pharmaceuticals (NASDAQ:ABOS) is working on a first-in-human immunotherapy drug candidate, ACU-193, “that was developed to selectively target toxic soluble amyloid beta oligomers.” Acumen is developing the drug as part of a partnership with Merck & Co. (NYSE:MRK). However, it’s important to note that Acumen holds the exclusive rights to ACU-193.
The company notes that more companies will likely introduce amyloid beta therapies as a primary treatment option. ABOS believes ACU-193 offers potential clinical and safety benefits that will make it a treatment of choice.
ACU-193 is the company’s only candidate. With it in Phase 1 trials, it will be several years before it has a commercially available product. That’s a big ask for investors who jumped on ABOS stock shortly after it went public in 2021. Still, if you’re looking for a moonshot in a category addressing an unmet need with a large addressable audience, this is one to watch.
On the date of publication, Chris Markoch did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
