Global Medical REIT (GMRE) is primarily engaged in the acquisition of licensed, state-of-the-art, all-purpose healthcare facilities and leasing these facilities to leading clinical operators under the long-term, triple-net lease structure, notes dividend expert Bryan Perry, editor of Cash Machine.
The company is taking full advantage of industry trends that are embedded for future growth. U.S. healthcare spending is expected to increase 5.8% per year over the next decade, according to the U.S. Department of Health and Human Services.
In terms of dollars, healthcare expenditures are projected to grow from $3 trillion in 2014 to $5.4 trillion by 2024, representing 19.6% of gross domestic product (GDP) four years from now.
The 65-and-over age group is expected to double between 2015 and 2060 and the 85-and-over age group is expected to triple between 2015 and 2060. Plus, changing healthcare trends are driving new real estate investment trust (REIT) structures like Global Medical.
Outpatient procedures are rapidly on the rise as patients demand this option. Technological advances make it possible, and physician groups are breaking away from hospitals to form their own outpatient solutions.
Global Medical’s widely diversified portfolio of properties is comprised substantially of off-campus medical office buildings, specialty hospitals, in-patient rehabilitation facilities and ambulatory surgery centers. This acquisition strategy coincides with taking advantage of the aging population and the decentralization of healthcare.
The company operates 139 modern facilities with a 100% occupancy rate by 84 high-quality tenants that occupy 2.6 million square feet of space with an average of 8.9 years remaining on outstanding triple-net lease terms.
GMRE came out with quarterly funds from operations (FFO) of $0.24 per share, beating the Zacks Consensus Estimate of $0.22 per share. This compares to an FFO of $0.21 per share a year ago. Rental revenue for the fourth quarter of 2020 increased 22.1% period over period to $24.9 million, reflecting the growth in the company’s property portfolio.
This quarterly report represents an FFO surprise of 9.09%. A quarter ago, it was expected that this REIT would post FFO of $0.21 per share, when it actually produced FFO of $0.23, delivering a surprise of 9.52%.
Over the last four quarters, the company has surpassed consensus FFO estimates three times. The company declared a quarterly dividend of $0.205, representing an annualized rate of $0.82 per share that translates to a current dividend yield of 6.06%.
Let’s put this all-weather healthcare REIT to work for us in our Safe Haven Portfolio and collect an incredibly attractive 6.06% dividend yield with the next ex-dividend date set for March 31. GMRE will pay $0.205 per share. Buy Global Medical REIT under $14.
