Thursday, June 20, 2013


Nursing Home
Nursing Home (Photo credit: LOLren)

Health Care Reit NHI delivers income and it is cheap.

I like to buy stocks when others are selling.   Nevertheless, be careful and do not use all your cash at once for the market could continue to deteriorate.   Look for a company that has good fundamentals but has suffered from a stock price viewpoint.  NHI, National Health Investors is just such a company.

National Health Investors – down 18.87%

NHI is a health care REIT (real estate investment trust.)   Investors buy a company like NHI for the dividend.  REIT’s are required to payout most of their earnings in order to maintain favorable tax status.  However, when interest rates go up, these yield heavy stocks tend to go down.  The theory is that increasing bond interest rates compete with the dividend yield and investors will sell the stock and buy bonds.

I consider a stock that has corrected nearly twenty percent and that still has the fundamentals of a dividend machine to be a bargain.   Therefore, I will consider adding to my position when the market opens in the morning.

National Health Investors – Dividend Machine Fundamentals

National Health Investors
Price when profiled
Last 4 Qtrs Earnings
Last 4 Qtrs Dividends
Current Qtr Dividend
Annualized Div Yield
No. Years Div Increase
Debt/Equity ratio

NHI meets all four criteria for being a dividend machine.   It earns $3.17 per share while it pays out $2.78 per share in dividends.  

When it makes more money, NHI pays its shareholders extra dividends.   At yesterday’s closing price of $59.20, the dividend yield is 4.7%.  NHI has increased the dividend every year since 2002 and carries a very respectable D/E ratio of .44.    The table at the right sums it up.

Be prepared, do your research, do not follow the crowd and invest on the dips.  


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