Watch Out for a Baby Boom!

05/27/2020 5:00 am EST

Focus: CONSUMER

Luke Burgess

Editor, Energy and Capital

The "Corona Babies" are coming. Sometime next year, I think we should expect an increase in child births. And investors should position themselves accordingly, asserts Luke Burgess, contributing editor to Energy & Capital.

How would I know that? Well, it's pretty simple; the combination of months-long lockdowns and disruptions to health services and access to contraceptives during the COVID-19 pandemic has created a perfect storm for new pregnancies.

The baby care products market is currently worth approximately $80 billion. So we're not talking about a burgeoning market by any means. Even without consideration of the COVID-19 effect on birth rates, forecasts estimate the baby care product market to be valued at nearly $110 billion by 2026.

Leading the baby market today are major companies like Johnson & Johnson (JNJ), Procter & Gamble (PG), Kimberly-Clark Corporation (KMB), and Nestlé (NSRGY).

JNJ is, of course, well-known for its baby products including shampoos, powders, and lotions. The company has an entire website dedicated to its baby products.

Meanwhile, Procter & Gamble and Kimberly-Clark are leading providers of diapers with brands including Pampers and Huggies, respectively.

Both companies — as well as Johnson & Johnson — also manufacture a multitude of baby care products like baby wipes. Meanwhile, Nestlé is the largest provider of baby formula in the world.

Other major baby stocks include Natus Medical (BABY), maker of birth center equipment, and companies like The Children’s Place (PLCE) and Carter's (CRI), which are specialty retail companies that sell apparel for children.

As one of the world's largest toy manufacturers, Mattel (MAT) is another major baby stock. The company's Fisher-Price division makes baby gear products, including baby monitors, booster seats, bouncers, car seats, high chairs, strollers, baby swings, tubs, and potties.

Whether it's companies providing products for baby care or those providing products and services for new parents, investors would be wise to prepare for a baby boom in the next several months.

Subscribe to Energy & Capital here…

Related Articles on CONSUMER

Keyword Image
Healthy Profits Grow at Sprouts
09/28/2020 5:00 am EST

While COVID-19 has wreaked economic and financial havoc on many businesses, it has actually bolstere...

Keyword Image
This BUD's for You
09/28/2020 5:00 am EST

The beer industry is attractive for long-term income investors. Beer companies enjoy tremendous rece...