What does an aging U.S. population have to do with investing? In this segment of Backstage Pass, recorded on Oct. 13, Fool contributors Brian Withers, Rachel Warren, and Trevor Jennewine discuss one stock to buy that can benefit from the changing age demographics of the American population.
Brian Withers: All right, moving on. Inflation has been the topic for a number of months now and it's such a pervasive thing that the government and the Social Security agency has decided that its cost-of-living adjustment for 2022, the payout that it makes to all of the folks collecting Social Security was going up 5% from this year to next year and that is the largest increase in cost-of-living adjustments in the last 40 years.
While this is certainly positive news for seniors, I'd like to focus on the longer-term trend that's kind of undeniable. Americans are getting older and we're living longer. Today less than 17% of the United States is 65 or older, and that's going to rise to 22% by 2050. So there's a major long-term trend here going.
Rachel, I am guessing you're going to pick a healthcare stock that could benefit in this long-term trend.
Rachel Warren: [laughs] You've guessed correctly. [laughs] You know me too well, yeah. Well, it's interesting, when I'm hearing these kinds of statistics about the changing age demographic of the U.S. population. Clearly one of the first sectors that's going to come to mind that I think could benefit from this trend is healthcare, and another one of my favorite stocks that I write about a lot in this sector is Intuitive Surgical (ISRG 2.87%) and that is ticker symbol, ISRG.
The company has a really strong competitive advantage because it is the unchallenged leader in the field of surgical robotics. So the company controls somewhere around 80% of the global surgical robotics market, it's a multi-billion-dollar market. There's other companies that sort of delve into this a little bit. But there's none that's really been able to challenge the position that Intuitive Surgical has and it has continued to maintain and grow its market share over time.
Robotic-assisted surgery for minimally invasive procedures is a field that's growing quickly and in surgical systems, like the ones that Intuitive Surgical makes, are used in all types of procedures, everything from thoracic to cardiovascular procedures and a lot of surgeries were deferred during the pandemic. This did impact Intuitive Surgical's short-term revenue results, but it has rebounded really well in 2021 and so far it's just been a really stellar year for the company.
For example, in the second quarter of this year, its revenue jumped 72% year over year, and procedures utilizing its da Vinci surgical system jumped almost 70% from the year-ago period. So just really stellar numbers there. The stock also has a really tremendous record of share price appreciation over time. It recently underwent a 3-for-1 stock split.
But even with that split having recently gone into effect, the stock is still up price-wise, more than 300% from [laughs] where it was trading five years ago. So it's a market-beating stock. It's a company that has a really strong competitive moat and an exceptional product that's in high demand and I think it's an interesting stock to consider particularly in light of these trends and sort of the age demographic in the US.
Trevor Jennewine: I really like that pick. I almost went into Intuitive Surgical myself.
