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3 ASX shares to buy to profit from rich baby boomers

Tristan Harrison
counting money, senior, old, long term

There are some businesses that are aimed at the entire population and others are focused on a small market such as wealthier baby boomers.

If you’re a millennial (or any other generation) and you want to profit from the wealthier retirees, then these three ASX shares could be the way to do it:

Ramsay Health Care Limited (ASX: RHC)

The private hospital operator is one of the main beneficiaries of Australia’s ageing population. Whilst public hospitals are used for emergencies, private hospitals are more often utilised by older wealthier Australians for elective surgeries.

It’s sadly unavoidable that the older we get the more likely it is that we need medical assistance of some sort.

Ramsay is one of the world’s largest private hospital operators and it’s even bigger after the recent Capio acquisition. With the recent Liberal election win and a growing dividend, there’s quite a few attributes to like about Ramsay for the long-term. But it certainly isn’t cheap at today’s price. 

Challenger Ltd (ASX: CGF)

Annuity provider Challenger’s key market segment is retirees, it turns a retiree’s capital into a guaranteed source of income.

The number of retirees is projected to grow by 40% over the next decade and 70% over the next two decades, which hopefully means growing management fees for the fund manager.

Obviously you have to be reasonably wealthy to decide to buy an annuity, but generating returns will be important over the long-term for Challenger to outperform the annuity return it’s giving to its clients.

Class Ltd (ASX: CL1)

Cloud accounting business Class has gone through a tough time in recent years as its main competitor steps up its game and self-managed super funds (SMSFs) seem less attractive, particularly due to falling house prices. Being able to buy individual properties is one of the most attractive features of a SMSF.

However, the share price has been punished so much that it could be an opportunistic time to buy with a continuing high retention rate and a fast-growing Class portfolio product.

Foolish takeaway

Each of these shares could be good ways to profit from rich baby boomers. On valuation grounds I think both Challenger and Class are interesting ideas, but I’m hesitant to buy their shares due to their shorter-term outlooks.

These top-quality ASX shares could also be good ideas to consider for a long-term buy.

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Motley Fool contributor Tristan Harrison owns shares of Challenger Limited. The Motley Fool Australia owns shares of and has recommended Challenger Limited. The Motley Fool Australia owns shares of Class Limited. The Motley Fool Australia has recommended Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019