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Americans aged 65 and older accounted for 17% of the U.S. population in 2020, or about 55.8 million, according to the U.S. Census Bureau.
Some will turn 80 this year, and is expected to create bigger demand for senior and care facilities. In fact, as quoted by CNBC, “The 80+ population is set to increase meaningfully over the next few years, which will drive a material increase in demand for senior housing,” wrote Jefferies analyst Joe Dickstein.”
We also have to consider that people are living longer, which increases demand even more. Plus, there’s a growing shortage of caregivers to meet the explosive demand.
As noted by Medsien.com, “The growing aging population is driving demand for more medical care, as we face provider shortages. Patients 65 and older account for 34% of the demand for physicians. And by 2034, patients over 65 will account for 42% of the demand. An aging population means higher use of health care services and a greater need for family and professional caregivers.”
So, what’s the best way to invest?
We suggest care facility real estate investment trusts not only for their exposure to a growing market but also for their yield.
Look at American Healthcare REIT (SYM: AHR), for example.
With a yield of 2.33%, American Healthcare REIT (SYM: AHR) is a real estate investment trust that acquires, owns and operates a diversified portfolio of clinical healthcare real estate, focusing primarily on senior housing communities, skilled nursing, and outpatient medical buildings across the United States, the United Kingdom and the Isle of Man. It also just paid out a dividend of 25 cents per share on October 17.
CareTrust REIT (SYM: CTRE)
We can also look at the CareTrust REIT, a “real estate investment trust engaged in the ownership, acquisition, development and leasing of skilled nursing, seniors housing and other healthcare-related properties.” It also yields 3.92% and just paid a dividend of $0.335 per share.
Earnings were ok. Its funds from operations (FFO) of 43 cents did miss by two cents. However, its revenue of $112.74, up 63.3% year over year, beat by $10.45 million.
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