Along the way to those certainties of life -- death and taxes -- there’s healthcare. And there are lots of real estate investment opportunities therein.
There are a number of ways to get involved, including the 17 real estate stocks that Nareit collects under the label of healthcare real estate investment trusts (REITs).
These companies’ tenants include hospitals of about every shape and size, medical office buildings and clinics, and senior living facilities on the continuum of care from independent living to skilled nursing care (nursing homes.)
Here’s a look at two healthcare REITs to consider buying in September.
LTC Properties (NYSE: LTC) puts its money in housing and healthcare for seniors, and in a lot of ways, including through sale-leasebacks; mortgage and construction financing; joint ventures; and preferred equity, bridge, mezzanine, and unitranche lending.
Currently, that investment is split evenly between senior housing and skilled nursing (nursing homes) and includes 176 properties under the management of 31 operating partners in 27 states.
Like many in this business, LTC Properties was hit hard by the pandemic shutdowns and the catastrophic effect of the virus in such facilities, but its recovery continues. For instance, in its 2Q21 report, the Westlake Village, California-based company said it grew funds from operations (FFO) from $12.0 million the year before to $22.2 million this time around.
LTC Properties stock was yielding 6.55% at a price of $34.85 on Sept. 2 and a 12-month dividend of $2.28 per share. LTC pays its dividends monthly, and the rate has been $0.19 each month since October 2016 when it raised the payout by a penny.
Medical Properties Trust
Medical Properties Trust (NYSE: MPW) focuses on providing capital to hospitals primarily through sale-leaseback arrangements that have made it one of the country’s largest non-governmental owners of hospital beds.
Based in Birmingham, Alabama, the company currently has 446 properties in nine countries, with 51 tenant relationships and about 47,000 licensed beds.
It’s an active buyer and seller. In June, MPT spent about $950 million in a sales-leaseback for 18 inpatient behavioral health hospitals and a stake in a major provider of those services. And on Sept. 1, the REIT announced it would take $1.78 billion from Macquarie Infrastructure Partners V for a 50% stake in a group of eight general acute care hospitals in Massachusetts and use the cash to pay down debt and help finance that June buy.
Medical Properties Trust has growth potential and the stability and income bent that make it a nice fit for a retiree’s portfolio. MPT stock was yielding 5.34% at a price of $21.44 on Sept. 2 and a 12-month dividend of $1.12 per share. The most recent quarterly dividend was $0.28 per share, and the company has grown the payout each year for the past six years, including by 12.50% in the past three years.
The Millionacres bottom line
Medical Properties Trust is focused on the shorter-stay side of the medical facility business, and LTC Properties does, well, long-term care and stands to benefit from a growing population of elderly Americans. But both are suitable for September consideration for a buy and hold.