1 Oversold Dividend Stock (With a 8% Yield) I’m Buying Right Now

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The market carnage seen in 2022 has raised dividend yields for many TSX companies. Investing in dividend stocks gives investors the opportunity to benefit from a steady stream of recurring income. Since dividends and stock prices have an inverse relationship, the recent sell-off across the equity market has given income-seeking investors the opportunity to buy stocks at discounts and pay more.

Since dividend payments are not guaranteed and can be withdrawn at any time, it is important to identify companies with strong balance sheets and stable payout ratios. Here, I analyze one such Real Estate Investment Trust (REIT) trades on the TSX: Northwest Healthcare REIT (TSX:NWH.UN)

A REIT operating in the healthcare space, Northwest currently pays shareholders a dividend yield of 7.9%. It pays investors a monthly dividend of $0.067 per share. So, investing $10,000 in a REIT would allow you to earn $790 in annual dividends.

Company Latest price Number of shares Dividends Total payout frequency
Northwest Healthcare REIT $10.07 993 $0.067 $66.53 Monthly

Northwest is a recession-proof REIT

The healthcare sector has been the source of much of the recession, making Northwest REIT one of the best TSX stocks you can buy right now. In addition to its tasty dividend payout, you also get exposure to sectors like real estate and healthcare, allowing investors to diversify their portfolios.

This REIT owns, acquires and manages properties in eight countries. Its tenants include companies engaged in the healthcare, life sciences and research verticals. Northwest Healthcare has successfully delivered value to institutional and retail investors through mineral growth and increasing tenant demand.

The REIT explains that it aims to build a portfolio in the curative segment of healthcare real estate. Therefore, its properties mainly include clinics, hospitals and medical office buildings. These properties are leased under long-term contracts that are indexed to inflation.

Northwest Healthcare said, “Targeting core and scalable high-acuity medical investments in key urban centers allows us to deliver stable and growing returns to our investors.”

It has invested in regions with strong healthcare infrastructure such as Australia, New Zealand, Canada and Europe.

Check out Northwest’s investment funds

Northwest Healthcare REIT holds substantial equity interests in each of its investment funds. These include the following:

  • Galaxy Australia: The fund was established in 2018 with a sovereign capital partner to invest in Australian-based healthcare assets. Northwest has committed to invest $5.4 billion in the fund, of which $3.1 billion has already been deployed. This fund has a 30% stake.
  • Galaxy Europe: Established in 2020, Northwest’s Galaxy Europe fund also works with a sovereign wealth partner. Northwest has committed $600 million to the fund with a total of $2.7 billion and a 30% stake.
  • Vital Healthcare Property Trust: Northwest holds a 28% interest in the fund and is partnered with Vital, which is listed on the New Zealand Stock Exchange. With an investment value of $2.8 billion, the fund manages 47 properties with an occupancy rate of 99%.

As of September 2022, an additional $2 billion has been earmarked for Northwest development projects.

Stupid carrying

While Northwest offers shareholders a high dividend yield, its stock is down 30% from an all-time high. Over the past decade, the stock has fallen 25%, but has returned 56% to investors after adjusting for dividends.

Position 1 oversold dividend stock (with 8% yield) I am buying now appeared first Motley Fool Canada.

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* Percentages as of 11/29/22

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Further reading

Stupid contributor Aditya Raghunath No position in any of the shares mentioned. The Motley Fool recommends NorthWest Healthcare Properties Real Estate Investment Trust. A motley fool Disclosure Policy.


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