Seniors are worth money.
What do the numbers of companies in the field reveal?
Contrary to what is commonly thought due to the precarious situation of some of the elderly population in Israel, this is a sector with improved resources compared to the general population.
Against the background of the data on an increase in life expectancy (despite the corona), we set out to examine what happened to the shares of companies that appeal mainly to the elderly.
Thursday, 30 June 2022, 08:05 Updated: 08:20
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A cartoon of the heroes of the elderly (Photo: ShutterStock)
The world is maturing and the purchasing power potential of seniors has not gone unnoticed by talented companies and entrepreneurs, who have entered the market today valued at about $ 6.9 trillion, and surprisingly are divided almost equally between the economies of North America, Europe and Asia.
Most of the purchasing power belongs to the 'baby boom' generation, which grew with the development of economies in the Western world after World War II, and was educated to save, a saving that serves it these days.
The justified criticism of the poverty rates among the elderly in Israel hides a significant part of the elderly population in the country, which amounts to about 12% of the general population and enjoys a significant purchasing power relative to the average (per person in the family).
Most of the purchasing power is found in budgetary pensions, personal capital and today even from rewarding work that lasted beyond retirement age.
Data from the Brookdale Institute show that the average gross monthly income of households with people aged 65 and over is about NIS 16,000, and in households with only people aged 65 and over the income is about NIS 14,000 on average.
It should be noted that this is an average, and as such there is a misconception in the statistics due to higher incomes among some seniors, on the one hand - and on the other hand the poverty rates in which there is a significant proportion of Israeli seniors.
As of the end of 2018, the bulk of the income for those aged 65 and over was from work and stood at 41%, mainly due to raising the retirement age among men to 67, along with the need for some seniors to continue working due to lack of pension or insufficient savings.
Pension and provident savings accounted for about 25% of the income of the elderly, about 25% came from pensions and support, and about 9% of their income came from the accumulation or inheritance of personal capital.
Most seniors spend most of their disposable income on medicines, health services and medical procedures, sheltered and community housing and dedicated pharma, food and cosmetics products.
The large companies that focus on the field of the elderly are mainly working to extend and improve their quality of life, and have become the most active activists for improving and extending human life, because as the question arises - so do their incomes continue to increase.
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"Third age stocks": have risen sharply since the low in Corona, but most have lost, as in most sectors, since the beginning of 2022 (Photo: Walla !, no)
Recovered from the corona
The danger lurking for the elderly in the Corona period has turned to gold by companies targeting this population, and has soared their shares on the stock exchanges by tens and hundreds of percent.
For example, the five companies we examined (see table) have risen by 174% since the corona (and after the recent sharp declines).
Leading the rise is Eli Lilly, a $ 309 billion-listed New York-based U.S. stock exchange that also soared 148 percent from the end of 2019 to its most recent test date. Arlis
Agusto, a research analyst at US ETF Global X
, explained to Walla! Money that "manufacturers, researchers and developers of drugs, health services, medical equipment and care for the elderly population have begun to grow more alongside growth in a percentage of the population." This is in the world.
It is estimated that this population is expected to grow by 192% during 2100 and that those aged 60 and over will make up about 40% of the world population this year, and companies that develop an accessibility advantage for this audience, and unique technology, will have an advantage.
Eli Lilly's stock growth, for example, reflects investors' attitude to the current and future growth expected in the field.
The company is working on an Alzheimer's drug that has shown good clinical results and is in the process of being approved by the FDA (US Food and Drug Administration).
It is estimated that if marketing is approved and started as early as this year, revenue from it will stand at about $ 6 billion by the time it reaches its peak distribution.
In addition, the company has a diabetes drug, which has also been found to be effective in reducing the fat excess of obese people, which is expected to bring in about $ 5 billion at its peak.
"The reason why the company's share is among the units that have risen since the beginning of the year is mainly estimated at a 25% increase in its revenues for the first quarter of the year, and we estimate that it is expected to continue with strong business results."
Expected increase in life expectancy (global average) in the coming years, according to a UN study (Photo: Official website, Global X from a UN study)
They have drugs
Agosto also addresses the needs that are a consequence of the physiological characteristics of seniors: "Pharmaceutical companies and health services lead the field, as these are some of the main issues faced by seniors, who are a high priority for them. For example, 80% of seniors report a problem. One chronic medical, and 60% of them report 2 or more chronic medical problems they suffer from.The
three most common problems are high blood pressure, which characterizes about 58% of the population, arthritis from which about 31% suffer, and Alzheimer's, which constitutes about 11% of chronic problems among
seniors.Another company whose share and business results have grown since the Corona recession is Welltower, which is also traded on the New York U.S. Stock Exchange and operates as a real estate investment fund designed for seniors.
Although the company's share has fallen by 2.8% since the beginning of the year, it has grown by 150% since the low of the corona and by 2% since the end of 2019. Most of its investments are located in sheltered housing, which constitutes about 70% of its real estate portfolio. Dedicated to treating Alzheimer's and dementia
It should be noted that the Corona has also accelerated the activities of companies, mainly in the provision of approvals for health services and home medical activities, which were previously conducted only through hospitals
. "For example, it is estimated that about 6.4 million people are waiting in line for a medical procedure."
Earlis Agosto, Research Analyst at US ETF Global X (Photo: GLOBAL X)
Not only mature but also challenging
But while the future of the money economy looks relatively rosy, most of the equities' stock companies, along with the rest of the markets, have entered a whirlwind of declines since the beginning of the year, reaching among the five companies that adorn our table to about 42%.
In addition, companies in the field still face many challenges, mainly related to the lack of savings of future aging generations, and the next challenge will be to keep the population healthier so that you can continue to work harder, and accumulate greater economic means.
Despite the expected challenges, it is apparent that both companies and investors are betting that most of the male and female models seen above the plasma screens in a few decades will be silver-haired.
The third age