Investors have a growing number of opportunities when it comes to investing in products or services that target the elderly population. According to the U.S. Census Bureau, by 2030, all Baby Boomers will be at least age 65, and as a result, the need for certain products and services will balloon. Demand for medical alert devices and the services that go with them is sure to increase as the Baby Boomer generation ages.
Medical Devices A Way To Monetize Baby Boomers Aging
Medical alert devices are systems installed in homes that enable the user to contact friends or family or emergency services with the push of a button or via a voice prompt in the case of voice-activated systems. With most systems, the user wears a button and then pushes that button if they fall or need help for any other reason.
The aging of the Baby Boomers could drive a 75% increase in the number of Americans ages 65 and older. As the Baby Boomers age, the more and more services they will need. According to the Population Reference Bureau, there are now more than 75 million Baby Boomers in the U.S., and as this demographic gets older, they may find themselves in need of medical alert devices.
Separating The Wheat From The Chaff
Investors who want to add medical alert devices to their investment portfolio should think carefully about where they want to invest. Many companies make such devices, but they can't all be winners. Some companies will undoubtedly beat others, with possibly two or three winners emerging from the battle as dominant forces. This doesn't mean that other medical device makers will go out of business, but it does mean that they could be less successful than the dominant layers.
Health.com researched the best medical alert devices, which is a great place to start when trying to decide where to invest within the industry. One of the issues with investing in this sector is the fact that the vast majority of the companies are private, but investors can still get a taste of it, both directly and in more creative ways.
Medical Device Industry Growth
There are other reasons that medical alert devices may be a wise investment theme. As the Baby Boomers get older, the quality of medical care continues to increase, which means they are living longer as well.
Additionally, the U.S. Census Bureau estimates that almost one-third of all seniors live alone, which amounts to almost 14 million seniors living independently. As they age, many seniors will want or need medical alert devices to ensure that they are never truly alone. Adult children will want to ensure that their aging parents will have help when they need it, even if they live alone.
Market Research Future estimates that the medical alert device market will see a compound annual growth rate of 6.46% between 2017 and 2027, valuing it at $17.29 billion in 2027. That's only three years before the entire Baby Boomer population reaches ages 65 or older, and the value of the industry is only going to increase as that demographic continues to age and live alone.
Private Equity Investments
High-net-worth individuals can invest in private companies through private equity. Some of the dominant private players in the industry are Bay Alarm Medical, AlertOne Service, Life Alert, Medical Guardian, LogicMark, Rescue Alert, GreatCall, and Tunstall Group. Some of the biggest publicly traded players in the medical alert device market include ADT, Koninklijke Philips, and Melrose Industries, which owns Nortek.
Investors can also seek out more creative ways to invest in the medical alert devices market. For example, many aren't aware that Apple offers fall detection on the Apple Watch. Users can also create an emergency Medical ID on the Apple Watch, making it an excellent choice for seniors. The device will also make a call to emergency services by pressing and holding the side button until the emergency SOS slider appears. In some ways, the Apple (NASDAQ: AAPL) Watch is a medical alert device that offers much more.
A similar play is Verizon (NYSE: VZ), which offers its Verizon Care smartwatch for seniors. The smartwatch uses a cellular service to call for help if the senior needs it. Like many medical alert device makers, Verizon also offers the Care Smart app for caregivers. The app allows caregivers to add up to 10 trusted contacts and manage medication reminders and location alerts.
Investing in the medical alert device industry isn't easy, but it does offer some interesting exposure for a portfolio with an interest in products or services targeting the aging Baby Boomer generation. The number of opportunities for investing in seniors will keep growing as the population ages and technology continues to improve.
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