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This High Quality 5.7% Yielding Healthcare REIT Is Very Attractive

Published Tue, 30 Jan 2018 15:20:35 -0500 on Seeking Alpha

Investment Thesis Welltower (HCN) is a REIT that invests in seniors housing and healthcare properties. It operates in three main segments: triple-net, seniors housing operating, and outpatient medical. The REIT is well-managed with a healthy balance sheet. Its focus on urban markets that has strong demand relative to other markets allow it to outperform its industry peers. Despite its attractive dividend yield of 5.7%, shares of Welltower can also be impacted in a rising interest rate environment.

Source: Investor Presentation
Why Welltower is a Good Investment Choice Favorable Demographic Tailwind
According to a 2014 report by U.S. Census Bureau (see first chart below), seniors population over 85 years old is expected to double in 20 years. This favorable demographic trend acts as a tailwind to Welltower's seniors housing and healthcare properties. Not only would the seniors population grew dramatically, it is estimated that an average senior between 65 to 84 years old spends on average 2.2 times than an average person in the United States (see second chart below). The average cost is even higher for seniors over 85 years of age. On average, an average senior over 85 years of age spends nearly 5 times the cost on health care than an average person in the United States. Welltower is expected to benefit from this long-term favorable demographic tailwind as demand for senior housing and healthcare services are expected to increase rapidly in the next few... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
HEALTH CARE REIT 52.22   41.1 1.27 3.48 6.40


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