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 are 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 3.13%, 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 25-cent per share dividend on April 17.
Analysts at Jefferies also initiated a buy rating on the REIT, calling it a “direct play on aging demographics” and noting that AHR is “one of the cleanest ways to invest in the aging demographics theme.”
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 4.65% after increasing its quarterly dividend to $0.335, which was paid on April 15.
Recent earnings were also solid, with its Q4 funds from operations (FFO) of 40 cents in line with expectations. Revenue of $86.94 million, up 45.6% year over year, beat by $9.69 million.
CareTrust’s President and CEO, Dave Sedgwick, added, “We finished a record year with a record quarter. Now all eyes are on 2025 and beyond. We continue to position the company to build on the momentum of impactful growth with top-tier operators. Our balance sheet, access to capital, team, partnerships, and opportunities to grow and diversify the portfolio are all in a stronger position than they were twelve months ago.”
With an aging population and growing demand for senior care, smart investors are turning to REITs like American Healthcare and CareTrust to capture long-term value and income. But while these stocks offer solid yields and demographic tailwinds, they may not be the only hidden gems in the market…
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