3 Charts That Show Healthcare Stocks Should Stay Hot for Years to Come

Predicting the future?

No one can consistently and accurately predict the future of stock performance.

However, there are 3 major trends that make the prediction of great years ahead for many healthcare stocks a pretty safe bet.

Source: Wikimedia Commons

Aging of the U.S. population

Aging of the U.S. population

The “silver tsunami” will have profound implications for the U.S. for decades to come

By 2024, the percentage of Americans age 65+ is projected to be over 18%. In 2008 that number was only 12.5% Source: Ethan Prater on Flickr

Healthcare spending on elderly

Source: Centers for Medicaid and Medicare Services

Healthcare spending on elderly

In 2010, over one-third of all healthcare spending in the U.S. went for those age 65+ -- the most of any age group.

The truly remarkable thing about this statistic – the number of Americans age 65+ in 2010 made up less than 13% of the total U.S. population.

Source: Public Domain

Increased healthcare spending

Source: Centers for Medicaid and Medicare Services

Increased healthcare spending

The trend of increasing number of older Americans combined with the historical higher level of spending for this group means soaring healthcare costs.

Expanded government health programs and more high-cost prescription drugs just add fuel to the fire.

Source: FoolEditorial on Flickr

Implications for healthcare stocks

Who will be on the receiving end of all of this additional money being spent? Plenty of healthcare companies.

Winners should abound across the entire industry – from drugmakers to medical device manufacturers to insurers and more. Here are three companies poised to profit.

Source: Pixabay

Johnson & Johnson (NYSE:JNJ)

This investors’ favorite includes three different areas of healthcare: pharmaceuticals, medical devices, and consumer products.

Expect J&J’s good fortunes to be driven especially by its growing drug portfolio – led by newer products like leukemia drug Imbruvica.

Aetna (NYSE:AET)

This health insurer is one of the top providers of Medicare plans across the U.S. and will only become larger with its pending acquisition of rival Humana.

Growing numbers of Americans in the 65+ demographic bodes well for Aetna’s stock performance in the coming years.

Express Scripts (NASDAQ:ESRX)

The nation’s largest pharmacy benefits manager (PBM) should benefit from increasing healthcare spending in a different way: Employers and insurers will need help controlling prescription drug costs.

Express Scripts’ scale gives it a competitive edge that should lead to solid stock performance.

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