According to a March 2023 study from the Bank of America Institute about consumer spending, seniors born in 1964 or earlier were the only age cohort in the U.S. increasing their year-over-year spending, not millennials, Gen Xers, or any other younger group. 

While seniors are often portrayed as cash-strapped retirees living on a fixed income, the study found that people 60 or older are better insulated against the vagaries of a higher-interest rate economy, providing them with greater discretionary spending than most, 

In addition, seniors often downsize in their 60s and 70s, generating even more spendable cash than your average younger person. Further, with Social Security COLAs (cost of living adjustment) averaging 5.1% over the past four years, while inflation has slowed in recent months, the boomers have more money available than most realize. 

The reality is that seniors have spent a lifetime accumulating and saving compared to younger cohorts, so they should have more discretionary spending available. 

Seniors spending more makes them an attractive target for these three companies. 

Key Points About This Article:

• Seniors and many others continue to take cruises by the boatload. 
• Senior healthcare is a big deal and profitable too.   
• Ozempic could become a drug for extending life.
• Sit back and let dividends do the heavy lifting for a simple, steady path to serious wealth creation over time. Grab a free copy of “2 Legendary High-Yield Dividend Stocks” now.

Royal Caribbean Cruises (RCL)

If a business is ideally suited to serving the senior demographic, it must be the cruise industry. 

According to data from CLIA (Cruise Lines International Association), the average age of a cruise traveler in 2024 is 46. While it’s been dropping in recent years, 24% of travelers remain boomers, tied for the largest cohort with Gen Xers. Further, 84% of boomer cruise travelers plan to do it again. 

That’s why cruise ship berths increased by 36% from 483,000 in 2016 to 656,000 in 2023. Between 2024 and 2028, they’re expected to grow another 14% to 745,000 in 2028. 

Unsurprisingly, Royal Caribbean Cruises (NYSE:RCL) stock has more than recovered from its pandemic lows around $23 in March 2020 to $225 today, a 10-fold increase in value in less than five years. 

In late October, Royal Caribbean reported Q3 2024 results that included $1.4 billion in adjusted net income, 27% higher than a year earlier. As a result, it expects full-year earnings per share of $11.60 at the midpoint of its guidance. 

Its shares trade at a reasonable 19.4x this estimate. With seniors unlikely to abandon cruising for anything but another virus, it looks like smooth sailing for RCL stock in the foreseeable future. 

Ensign Group (ENSG)

Health care is one of the other hottest sectors catering to the seniors market. Ensign Group (NASDAQ:ENSG) is a leading provider of skilled nursing and senior living services, physical, occupational, and speech therapies, other rehabilitative and healthcare services, real estate, and other services. 

The company first entered senior living in 2011. At the time, it operated 93 healthcare facilities; today, it operates 323. Its three largest markets are Texas (84 facilities), California (70), and Arizona (38). The company has facilities in 14 states and is expanding into new markets. 

However, to be fair, senior living accounts for just 11 of the 323 facilities. Many of its senior living facilities were spun off to Pennant Group (NASDAQ:PNTG) in 2019, who leased them from Ensign Group. Further, its various services provided along the healthcare continuum involve large groups of seniors. 

Of the 323 facilities it operates, it owns 122, so Ensign Group provides investors with a business model between asset-light and asset-heavy. 

Since 2015, it’s averaged 15% and 16% annual revenue and EBITDAR (earnings before interest, taxes, depreciation, amortization, and restructuring and rent costs) growth. Not surprisingly, its total shareholder return in the past decade is 1,428%.

Ensign Group’s revenues and EBITDAR will continue to grow as the population ages, delivering larger shareholder returns.

Novo Nordisk (NVO)

 

According to top aging expert Dr. Nir Barzilai, the director of The Institute for Aging Research at the Albert Einstein College of Medicine, four FDA-approved drugs could promote longer life. 

According to Barzilai, one drug that shows potential is GLP-1s like Novo Nordisk’s (NYSE:NVO) Ozempic and Wegovy. I know several people using them for weight loss, and it’s been a game-changer for them, primarily because the weight loss is all over rather than in one or two areas.   

“‘It was developed for diabetes, and it was shown to actually decrease obesity,’ says Barzilai, who adds there is evidence of a reduced risk of heart disease, kidney disease, Parkinson’s, and Alzheimer’s. The drugs scored a 10 out of 12 on the gerotherapeutic scale. ‘It actually targets the mechanisms of aging,’” Fortune reported on Oct. 29.   

The company reported Q3 2024 results on Nov. 6. Sales increased by 21% from a year ago to $10,24 billion, slightly less than Wall Street’s estimate of $10.36 billion. Excluding currency, sales rose 23%. Its net income was $3.94 billion, about $110 million higher than the consensus and 21% better than a year ago.

With a healthy 38.3% net margin, it remains an excellent way to benefit from seniors’ spending.   

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