Wednesday, July 24, 2013

Top Health Care Reit for your Retirement Income

Seniors are a growing population in the U.S. and other developed counties.  Here in the U.S., demand for senior independent living and assisted living options just continues to go up and that is why I like real estate investment trusts that own and operate these properties.   

One of the problems with this sector is that it is kind of expensive.   Average price earnings ratios for the industry are well above other industries; some companies have P/E ratios in the 40’s.    However, my four criteria for picking dividend stocks for retirement do not include P.E ratios.   

My four criteria include EPS (earnings per share), Yield (dividend yield), Growth (dividend increases over time) and Debt (debt to equity ratio.)   With those four criteria in mind I am adding National Health Investors, symbol NHI to my 2013 dividend stock portfolio.

NHI is a 2011 and 2012 Dividend Machine:

In both 2011 and 2012, NHI made the cut as a dividend machine and it does it again.   You can click on these links if you want to review the dividend fundamentals of this company in 2011 and 2012.  

2011 Dividend Machine:

2012 Dividend Machine:

NHI as a 2013 Dividend Machine:

Over the past eleven years, NHI has consistently delivered increasing dividends.   As a REIT (real estate investment trust) the company must distribute most of its earnings.    NHI has paid extra dividends as cash accumulates at the company.    I like that statistic.

In 2013, I want more than four percent in dividend yield and NHI’s annual dividend of $2.94 is a 4.61% yield on today’s price of $63.76.  Their D/E ratio is .44; very respectable.   I own this stock and added today on weakness.   See the table below for NHI’s 2013 Dividend Machine fundamentals.

Only you can decide if NHI is a good fit for your retirement income portfolio.    If NHI continues to execute their business plan in an environment of continued demand, we investors should be handsomely rewarded.