While it doesn’t seem like it when you’re young, aging happens to everyone and therefore, so-called AgeTech stocks should benefit from inevitability. A buzzword for age-related technology, this concept refers to a rapidly growing field focused on developing and applying innovative solutions to improve the lives of senior citizens. The segment encompasses the full range of aging needs, from maintaining health to enhancing independence.
Fundamentally, these longevity stocks benefit from simple math. As an AP report noted last year, America aged rapidly as baby boomers grew older and births dropped. And that came about because when the baby boomer generation was born, the cohort represented a swarm of new humanity as the U.S. entered a post-war resurgence. However, as with anything in life, there is an ebb and flow.
Thanks to the rise in medical and therapeutic technologies, people have the opportunity to live longer than ever. Logically, that will impact society for years to come. At least from a narrative standpoint, these AgeTech stocks should command longstanding relevance.
Best Buy (BBY)
Ordinarily, you’d think of Best Buy (NYSE:BBY) as one of the top retail enterprises, not an AgeTech stock. However, it’s been moving into the senior care realm. Last year, the company’s Best Buy Health unit – which seeks to enrich lives through technology – updated its Lively plan to better help seniors stay connected, safe, and healthy.
For a subscription fee, Best Buy connects its senior users with a knowledgeable, caring team to address urgent matters, day or night. Just based on current trends, demand for such services could rise. According to a Pew Research Center report in November 2020, the pace of boomer retirements accelerated versus the prior year. Such a dynamic will continue to “exacerbate” for lack of a better word for years to come.
Of course, longevity stocks can be a tricky element because of the niche focus. Fortunately, Best Buy is a diversified retailer, serving multiple consumer needs. Better yet, shares are available at a discount, trading at just under 12X forward earnings. If you want an AgeTech stock you can trust, BBY seems a reasonable deal.
At first glance, Apple (NASDAQ:AAPL) doesn’t seem the most compelling example of AgeTech stocks. After all, the company’s products tend to cater to the hipper, younger audience – you know, the kind that are glued to its smart devices. However, Apple’s versatility makes it an excellent candidate among longevity stocks. As well, its ubiquity doesn’t hurt one bit.
For one thing, Apple has dove headfirst into the consumer wearable technology market. True, that doesn’t necessarily translate to direct relevance regarding AgeTech stocks. However, the Apple Watch features a fall detection feature, which can automatically connect the unfortunate user to emergency services if needed. Further, for years, the tech juggernaut has incorporated emergency SOS services into its iPhones. That’s useful for anyone in need, especially senior citizens.
Further, a report came out that a doctor was able to save a plane passenger’s life using an Apple Watch borrowed from a flight attendant. That just goes to show you how powerful these smart devices are. If you’re looking for a viable AgeTech stock, AAPL should be on your must-have list.
A multinational technology corporation, Microsoft (NASDAQ:MSFT) also doesn’t immediately resonate as an AgeTech stock. Instead, the company is well known for its software, especially its Microsoft Office suite of word processors, spreadsheets and other necessities of white-collar life. Also, the company dominates in the desktop operating system arena. If you’re not fluent in Microsoft, you’re not getting very far in this modern ecosystem.
That said, Microsoft isn’t only about spreadsheets and Xboxes. For example, the company offers accessibility tools for mental health, including people who suffer from bipolar disorder, anxiety, post-traumatic stress disorder (PTSD) or depression. Although mental health risks aren’t exclusively a phenomenon impacting seniors, it’s important to note their vulnerability. Per the World Health Organization, loneliness and social isolation represent risks in later life.
As well, Microsoft’s latest operating system upgrade features options such as larger text, voice control and simplified interfaces. Combine that with its stout financials and MSFT easily ranks among the top AgeTech stocks. Analysts also rate shares a unanimous strong buy (among 35 expert voices).
Based on price action, Teladoc (NYSE:TDOC) shares incurred a rags-to-riches-back-to-rags tale and it’s no surprise why. Back during the worst of the Covid-19 disaster, Teladoc – which offered telehealth services – commanded obvious relevance. During that time, no one wanted to be around other people. With telehealth, patients could interact with their doctors in the privacy of their own homes.
However, with the fading of fears of the SARS-Cov-2 virus came a quick erosion of TDOC. Once a bright prospect among longevity stocks, Teladoc struggled for traction. Even now, its trailing 52-week performance leaves much room for improvement. Nevertheless, don’t be surprised if TDOC makes a second comeback. Notably, its short interest stands at 14% of its float, which is quite elevated, begging for a contrarian response.
As for its relevance as an AgeTech stock, seniors may see reduced mobility; for example, many may lose their ability to drive. Naturally, such an obstacle would crimp in-person medical visits. However, Teladoc could easily bridge the gap, providing care at the source. Thus, it makes a strong case for longevity stocks.
Abbott Laboratories (ABT)
A multinational medical devices and healthcare company, Abbott Laboratories (NYSE:ABT) offers effectively permanent relevance. Regarding its core business, Abbott may be best known recently for its diabetes management system known as FreeStyle Libre. Featuring a discreet profile with accurate readings, Libre also does away with fingersticks, which can cause pain or discomfort.
Now, (type 2) diabetes is not exclusively a problem for seniors. However, according to the Mayo Clinic, the risk of this condition materializing increases with age, especially after 35 years. Therefore, seniors fall into a clear risk category, making ABT a pertinent Agetech stock. Also, Abbott invests heavily in artificial-intelligence-powered diagnostics and personalized medicine approaches. Both can lead to early disease detection, which is particularly important for aging populations.
Plus, Abbott has a clear advantage over many other AgeTech stocks thanks to its reliable passive income. Currently, its forward yield is 1.99%, which isn’t that impressive. However, the company has increased its payout consecutively across 52 years. That most certainly is impressive – and so is its strong buy rating with a $125.70 price target.
Based in Bloomfield, Connecticut, Cigna (NYSE:CI) is a for-profit multinational managed healthcare and insurance firm. According to its corporate profile, Cigna’s insurance subsidiaries represent major providers of medical, dental, disability, life, and accident insurance and related products and services. To be sure, investors probably won’t get rich off of CI stock. Rather, it’s a slow-and-steady mechanism to build wealth.
Fundamentally, Cigna ranks among the AgeTech stocks due to its Medicare Advantage plans, which include innovative benefits such as telehealth access, chronic disease management programs, and in-home care services. All of these services should resonate with seniors and their unique challenges. Also, Cigna approaches the aging population in a holistic sense, partnering with other organizations to provide mental health support for older adults and other vulnerable populations.
Moving onto the financials, Cigna doesn’t exactly have standout statistics other than its consistent profitability. However, it keeps the boat afloat with very few fiscal concerns. As a bonus, CI trades at a forward earnings multiple of 10.76X, lower than the sector median 12.77X. Thus, it’s an intriguing AgeTech stock.
ReWalk Robotics (RWLK)
Coming to the last idea for AgeTech stocks, I’m going to end on a speculative note. I’ve discussed ReWalk Robotics (NASDAQ:RWLK) before, which develops and markets exoskeletons that help individuals with spinal cord injuries regain walking ability. It’s a fascinating enterprise, which offers hope for many mobility-challenged individuals.
Looking at its website, the company appears to focus on restoring functionalities for people who have suffered injury or physical trauma (i.e. wounded veterans). However, ReWalk also offers the ReStore Soft Exo-Suit, which represents a “revolution” in post-stroke gait training. Essentially, the platform facilitates rehabilitation for people with lower limb disability due to the effects of a stroke. And yes – age is definitely a factor when assessing stroke risk.
As exciting as ReWalk’s exoskeleton business is, we have to be honest with each other: RWLK is incredibly treacherous. Over the trailing month, it has danced around the demarcation point separating the literal and metaphorical definition of penny stocks. It also features a market capitalization that’s barely above the nano-cap threshold.
Still, if you’re willing to take risks with your AgeTech stocks, RWLK should be on your radar.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.