One method of ensuring possible gains is to find companies that can benefit from societal trends. Perhaps you think the world is moving to a more predominantly work-from-home organization, so BlackBerry may be a good company to invest in. Or maybe you think e-commerce will overtake physical retailers in sales, so you choose to invest in Shopify.
The fact is, the global population is aging, and many people will require increased medical attention. Companies that provide medical services, products, and spaces may all see an increased demand in the coming years. If you want two stocks that may benefit from this, then keep reading.
A leading provider of services
The first company in this article is an emerging leader in providing innovative medical products and services in gastroenterology treatments. CRH Medical (TSX:CRH) has two business segments, the first of which is its legacy business, the CRH O’Regan System. The O’Regan System gives clinicians a readily available solution for the treatment of hemorrhoids, providing training, treatment protocols, product supply, and operational and marketing expertise and support. CRH Medical estimates a potential client base of three million patients per year.
The second segment of its business came in 2014, when the company entered the GI anesthesia business. The demand for anesthesia services for endoscopic procedures is constantly growing. The most common gastroenterology procedure is the colonoscopy. As it is the norm for anesthetics to be provided during this procedure, the demand for the company’s services will only grow with the demand in the procedure.
A global portfolio of assets
The next company owns a globally diversified portfolio of medical spaces. With a total of 135 properties, NorthWest Healthcare Properties (TSX:NWH.UN) is a leader in healthcare real estate in Canada, Australia, Brazil, Germany, and New Zealand. The company’s potential is most interesting in Brazil and Germany, as NorthWest takes advantage of rapidly increasing populations and a high proportion of elderly citizens in these countries.
Although there has always been a high level of occupancy within the company’s properties, that number is continuing to increase. This has resulted in a consistent year over year increase in the company’s top line. Revenue has increased 32% over the past four years. NorthWest has also been a reliable dividend distributor. Since 2017, the company has been able to maintain a dividend yield of 6.5% to 8%, all while reducing its dividend-payout ratio.
NorthWest is currently trading for good value, with a price-to-book ratio of 1.27. As the company continues to grow in the future, grabbing shares at a very attractive current valuation could be a great move.
Investing in industries that are bound to see a large increase in demand is one way to find quality investment returns. There is an increasingly large proportion of the global population that is aging. This will result in a greater demand in healthcare services. Because of this, companies providing medical services and spaces are sure to benefit. Look at these two companies to take advantage of the increasing demand in this industry.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Jed Lloren owns shares of Shopify. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify. The Motley Fool recommends BlackBerry, BlackBerry, CRH Medical, and NORTHWEST HEALTHCARE PPTYS REIT UNITS.