Medical Properties: Healthy REIT

05/10/2016 8:00 am EST

Focus: REITS

Jim Powell

Principal Analyst, Global Changes & Opportunities

One way to invest in rental real estate without actually owning it is to buy the stocks or REITs (real estate investment trusts) of companies in the industry, explains Jim Powell, editor of Global Changes & Opportunities.

One REIT that looks particularly attractive to me is Medical Properties Trust (MPW). The company invests in healthcare facilities that it develops and leases to doctors and other medical professionals.

The company also offers mortgages and capital improvement loans to healthcare operators.

Its portfolio of properties currently includes 22 acute care hospitals, 17 long-term hospitals, 9 inpatient rehabilitation hospitals, 2 medical office buildings, and 6 wellness centers. Several additional projects are in the pipeline.

Medical Properties Trust is also growing by acquisition. The company recently agreed to merge Capella Healthcare into RegionalCare Hospital Partners to create one of the largest healthcare operating companies in the United States.

Capella and RegionalCare currently operate 18 hospitals across 12 states, with no overlap, generating annual revenues of $1.7 billion.

I like MPW's prospects for growth in the promising healthcare industry. However, the REIT's main appeal is its very attractive 6.91% income distribution.

Although the yield will vary from year to year, I think it is likely to remain at least twice what investors can get elsewhere with comparable reliability and safety.

Subscribe to Global Changes & Opportunities Report here.

By Jim Powell, Editor of Global Changes & Opportunities

More from

Healthcare REITs

Welltower Preferred: In the Sweet Spot

Digital Realty: Data and Dividends

  By clicking submit, you agree to our privacy policy & terms of service.

Related Articles on REITS