Monthly Dividend Stock In Focus: NorthWest Healthcare Properties Real Estate Investment Trust

Up to date on April nineteenth, 2025 by Felix Martinez

NorthWest Healthcare Properties Actual Property Funding Belief (NWHUF) has three interesting funding traits:

#1: It’s a REIT so it has a good tax construction and pays out nearly all of its earnings as dividends.
Associated:  Listing of publicly traded REITs

#2: It’s a high-yield inventory primarily based on its 7.3% dividend yield.
Associated: Listing of 5%+ yielding shares

#3: It pays dividends month-to-month as an alternative of quarterly.
Associated: Listing of month-to-month dividend shares

You may obtain our full Excel spreadsheet of all month-to-month dividend shares (together with metrics that matter like dividend yield and payout ratio) by clicking on the hyperlink under:

NorthWest Healthcare Properties Actual Property Funding Belief’s trifecta of favorable tax standing as a REIT, a excessive dividend yield, and a month-to-month dividend makes it interesting to particular person buyers.

However there’s extra to the corporate than simply these elements. Maintain studying this text to study extra about NorthWest Healthcare Properties Actual Property Funding Belief.

Enterprise Overview

NorthWest Healthcare Properties Actual Property Funding Belief is an open-ended actual property funding belief with a portfolio of high-quality worldwide healthcare actual property infrastructure comprised of pursuits in a portfolio of 186 income-producing properties and 16.1 million sq. toes of gross leasable space situated all through main markets in Canada, Brazil, Europe, Australia, and New Zealand.

Supply: Investor Presentation

The REIT’s portfolio of medical workplace buildings, clinics, and hospitals is characterised by long-term listed leases and steady occupancies. With a totally built-in and aligned senior administration group, the REIT leverages over 200 professionals throughout 9 workplaces in 5 international locations to function a long-term actual property companion to main healthcare operators.

NorthWest Healthcare Properties REIT has a excessive occupancy price of 96.0% and a weighted common lease length of about 12.9 years. The lengthy lease length provides nice visibility into future money flows. The REIT can be extremely diversified geographically, and, extra importantly, it’s considerably protected against excessive inflation due to contractual hire development yr after yr.

Progress Prospects

The healthcare actual property market has many enticing traits. Firstly, it is without doubt one of the largest industries on the planet, accounting for greater than 10% of worldwide GDP. Roughly $8 trillion is spent on world healthcare yearly. Moreover, healthcare spending is rising at an annual price of 4%-7%.

Supply: Investor Presentation

Furthermore, the healthcare business advantages from favorable demographics, due to a rising and growing older world inhabitants. Because the 65+ group continues to develop, it’s the group with the best spending energy, and world healthcare spending is prone to proceed rising at a speedy tempo for the subsequent a number of years.

Moreover, NorthWest Healthcare Properties REIT has constructed a quickly rising asset administration platform. Due to this platform, the belief enjoys fast-growing administration charges. Whereas administration charges considerably cooled within the newest quarter, they’re prone to stay a fabric development driver within the upcoming years.

General, NorthWest Healthcare Properties REIT has ample room for future development due to the secular development of the healthcare business. Then again, excessive rates of interest are prone to take their toll on the belief’s backside line within the upcoming quarters.

NorthWest Healthcare Properties REIT has lowered its FFO per unit by 6.5% yearly on common over the previous 5 years. Nonetheless, given the above elements, we count on the REIT to develop its FFO per unit by about 2.0% per yr on common over the subsequent 5 years, roughly in keeping with its historic development price.

Dividend & Valuation Evaluation

NorthWest Healthcare Properties REIT is presently providing a dividend yield of seven.3%. It’s thus an attention-grabbing candidate for income-oriented buyers, however the latter must be conscious that the dividend could fluctuate considerably over time as a result of fluctuations in trade charges between the Canadian greenback and different foreign exchange, in addition to the USD.

Furthermore, the REIT has an elevated payout ratio of practically 100%, which considerably reduces the protection margin of the dividend.

Relating to valuation, NorthWest Healthcare Properties REIT is presently buying and selling at solely 12.6 occasions its FFO per unit over the past 12 months. The low valuation has resulted primarily from the anticipated influence of upper curiosity bills on the underside line and the impact of excessive inflation on the valuation, as excessive inflation considerably reduces the current worth of future money flows.

Given the fabric debt load of the REIT, we assume a good price-to-FFO ratio of 11.0 for the inventory. Subsequently, the present FFO a number of is greater than our assumed honest price-to-FFO ratio. If the inventory trades at its honest valuation degree in 5 years, it can end in a 1.4% annualized loss.

Making an allowance for the two% annual FFO-per-unit development, the 7.3% dividend, and a 1.4% annualized compression of valuation degree, NorthWest Healthcare Properties REIT might provide a 7.9% common annual whole return over the subsequent 5 years. This can be a modest anticipated return, particularly for the buyers who count on inflation to subside swiftly to its regular ranges. However, the inventory is appropriate just for buyers who’re comfy with the danger related to the belief’s substantial debt load.

Remaining Ideas

NorthWest Healthcare Properties REIT has the benefit of working belongings within the world healthcare business, which enjoys sturdy and dependable secular development. Regardless of its excessive payout ratio of over 100%, the inventory is providing an exceptionally excessive dividend yield of seven.3%. Therefore, it’s a horny candidate for the portfolios of income-oriented buyers, notably provided that the inventory is anticipated to yield a return of seven.9% per yr over the subsequent 5 years.

Then again, buyers ought to pay attention to the dangers related to the REIT’s weak steadiness sheet. If excessive inflation persists for for much longer than presently anticipated, excessive rates of interest will vastly burden the REIT. Subsequently, solely the buyers who’re assured that inflation will quickly revert to regular ranges ought to contemplate buying this inventory.

Furthermore, NorthWest Healthcare Properties REIT is characterised by exceptionally low buying and selling quantity. Because of this it’s laborious to ascertain or promote a big place on this inventory.

Don’t miss the assets under for extra month-to-month dividend inventory investing analysis.

And see the assets under for extra compelling funding concepts for dividend development shares and/or high-yield funding securities.