The world’s population is quickly aging.
Between 2019 and 2050, the number of people 65 or older is projected to more than double around the world, Bank of America analysts wrote in a commentary.
That will stem from an increase in life expectancy and a drop in fertility rates, they said. The world’s greying will mean “structural trends of rising old-age dependency, smaller labor forces, challenged pension viability, higher healthcare spending and pressure on public budgets,” the analysts said.
The solutions include “innovations and investments in health and training, greater technology adoption, automation, artificial intelligence, smarter care and financial planning,” they said.
Sectors that will benefit include financial services, healthcare and life science.
The analysts identify 11 stocks that should benefit from the aging trend:
· Prudential (PUKPF) , a U.K. emerging-markets focused insurer;
· AIA Group (AAIGF) , a Hong Kong-based, Asia-Pacific insurer;
· JPMorgan Chase JPM, the U.S.’s biggest bank;
· UBS XUHJF, the Swiss Bank;
· Amundi (AMDUF) , a Paris-based asset manager;
· Nihon M&A Center (NHMAF) , which offers mergers & acquisition and IPO services;
· SMS (SMSZF) , a Japanese nursing recruitment company;
· AMN Healthcare Services (AMN), a U.S. healthcare staffing company;
· Confinimmo CFMOF, a Belgian healthcare real estate investment trust;
· Aedifica (AEDFF) , another Belgian healthcare real estate company; and
· Welltower (WELL), a U.S. healthcare REIT.
Morningstar’s Take on JPMorgan Chase
Morningstar analyst Eric Compton assigns the company a wide moat and puts fair value for the stock at $151. It recently traded at $128.06.
“JPMorgan Chase is arguably the most dominant bank in the U.S.,” he wrote in a commentary.
“With leading investment bank, commercial bank, credit card, retail bank, and asset and wealth management franchises, JPMorgan is truly a force to be reckoned with.”
Further, “the bank's combination of scale, diversification, and sound risk management seems like a simple path to competitive advantage, but few other firms have been able to execute a similar strategy,” Compton said.
“Even the best-managed banks are not immune to the occasional stumble, but JPMorgan has managed to seemingly put all the pieces together in a more cohesive and less error-prone way than peers.”
Morningstar’s Take on Welltower
Morningstar analyst Kevin Brown gives the company no moat and puts fair value for the stock at $97. It recently traded at $86.03.
“Welltower will benefit from … industry tailwinds because of its portfolio of high-quality assets connected to top operators in the senior housing, skilled nursing facilities, and medical office buildings segments,” he wrote in a commentary.
“The company has also spent years forming and developing relationships with many of the top operators in each segment. These relationships allow Welltower to push revenue enhancing initiatives and cost-control efficiencies at the property level.”
But Welltower doesn’t receive a moat, because senior housing is one of Welltower’s largest segments, Brown said. There’s no barrier to entry in that sector, meaning no limit on supply.
