Actual property funding trusts (REIT) are among the greatest methods to create passive revenue. And one main winner over the previous few years has been NorthWest Healthcare Properties REIT (TSX:NWH.UN).
Nicely, that’s, total. But when the pandemic restrictions got here down and rates of interest rose, NWH inventory fell in share worth. This led to a slice of its dividend. However now, issues are wanting up. Actually. Shares of NWH inventory have risen 29% since 52-week lows. So must you get in earlier than it reaches 52-week highs?
Right here’s what traders must know earlier than making the transfer.
The dividend
First, the rationale you’re right here. The REIT pays dividends on a month-to-month foundation, which is interesting for traders searching for common revenue. For June 2024, the distribution was $0.03 per unit, which interprets to an annualized distribution of $0.36 per unit. That dividend involves a yield of seven.2% as of writing.
NorthWest Healthcare REIT provides a Dividend Re-Funding Plan (DRIP), permitting unitholders to reinvest their money distributions into further items of the REIT. This reinvestment is completed at a reduced worth, offering an incentive for traders to compound their funding over time. Particularly, members within the DRIP obtain bonus Belief Models equal to three% of their money distributions. This function not solely boosts the variety of items held but additionally enhances the potential for long-term progress.
The mix of standard month-to-month distributions and the advantageous DRIP makes NorthWest Healthcare REIT a sexy choice for traders searching for each regular revenue and progress potential by way of reinvestment.
Geographically various
NorthWest Healthcare REIT’s international diversification is one in every of its core strengths, offering stability and decreasing threat by way of geographical unfold. The REIT owns and operates a portfolio of healthcare actual property properties throughout North America, Brazil, Europe, and Australasia.
This broad geographical footprint helps mitigate the dangers related to any single market or financial surroundings. As of March 31, 2024, the REIT’s portfolio included 210 income-producing properties and 17.four million sq. toes of gross leasable space.
The portfolio is diversified not solely geographically but additionally by property kind. It consists of medical workplace buildings, clinics, and hospitals, that are leased to healthcare operators. These leases are usually long-term and listed to inflation, offering a secure and predictable revenue stream.
The REIT continues to pursue strategic acquisitions and partnerships to develop its international portfolio. This consists of buying high-quality healthcare properties and getting into into joint ventures with main healthcare suppliers.
Strategic initiatives
NorthWest Healthcare REIT has undertaken a number of strategic initiatives to strengthen its monetary place, improve its portfolio, and drive long-term progress. The REIT is actively concerned in buying high-quality healthcare properties and disposing of non-core property. This technique helps in optimizing the portfolio, guaranteeing that it’s comprised of properties that align with the REIT’s long-term objectives of stability and progress. Latest acquisitions have centered on high-demand markets with robust healthcare infrastructure, whereas inclinations have aimed toward divesting properties that now not meet strategic targets.
NorthWest Healthcare REIT has engaged in numerous financing actions to strengthen its steadiness sheet and help its progress initiatives. This consists of refinancing current debt at beneficial phrases and securing new financing to fund acquisitions and growth tasks.
NorthWest Healthcare REIT continues to type strategic joint ventures and partnerships with main healthcare operators. These collaborations allow the REIT to leverage the experience and assets of its companions, facilitating entry into new markets and enhancing its service capabilities.
Backside line
The mix of standard month-to-month distributions and the advantageous DRIP makes NorthWest Healthcare REIT a sexy choice for traders, particularly these searching for each regular revenue and progress potential by way of reinvestment.
Add in its geographically various operations, excessive occupancy charges, and bringing its funds underneath management, and NWH inventory is actually one to contemplate. Particularly because it continues to climb.