4 Health Care REITs to Buy That Offer Growth and Pay Big Dividends

As we have noted before, the United States has an aging population, and one that is growing older, faster. The demand for medical services, assisted living, Alzheimer’s care and many other health care related services continues to skyrocket. In addition, the demand seems to be very solid for facilities that cater to this aging population and their needs.

A new RBC research report takes an in-depth look at the health care real estate investment trusts (REITs) and dissects the growth prospects versus concerns that some have voiced over too much supply developing.

RBC has 10 companies in its research coverage and five are rated Buy. Here we focus on the four with the highest distribution rate. It is important to remember the REIT distributions can contain return of principal.

CareTrust

This smaller cap company made a strong move off the February lows, but it is still trading below levels printed last year. CareTrust REIT Inc. (NASDAQ: CTRE) is a self-administered, publicly traded REIT engaged in the ownership, acquisition and leasing of seniors housing and health care related properties. With 136 net-leased health care properties and three operated seniors housing properties in 18 states, CareTrust is pursuing opportunities nationwide to acquire additional properties that will be leased to a diverse group of local, regional and national seniors housing operators, health care services providers and other health care related businesses.

The company recently announced that it has acquired Victory Park Nursing Home, a 55-bed skilled nursing facility, and Victoria Retirement Community, a skilled nursing and assisted living campus with 90 skilled nursing beds and 69 assisted living units. Both facilities are located in Cincinnati, Ohio.

Care Trust investors receive a very solid 5.4% distribution. The RBC price objective is $13, and the Thomson/First Call consensus price target is $13.60. The stock closed most recently at $12.67.

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