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National Healthcare: Homecare, Assisted Living and Rehab

09/25/2018 5:00 am EST

Focus: HEALTHCARE

Neil Macneale III

Editor, 2 for 1 Stock Split

Neil Macneale is the editor of 2-for-1 Stock Split Newsletter, a speciality advisory service in which he maintains a model portfolio of stocks that have announced upcoming splits. One problem, he notes, is that splits have been few and far between in recent months.

Indeed, the recent splits deserving investment consideration have been small banks or insurance companies; we already own stocks in these sectors and we run the risk of becoming overweight in the financials

Other recent splits we have seen are too small and/or too thinly traded to be eligible for the 2 for 1 portfolio. So we again find ourselves going outside the stock split world to find another promising company with the same qualities as the winners in the portfolio, but without the stock split advantage.

There is risk in this approach, but it’s the only way I can see to keep the portfolio refreshed while we wait for a rebound in stock split announcements.

National Healthcare Corp. (NHC) is my pick this month for several reasons. One, it has a great score in our ranking chart. Two, NHC pays a 2.6% dividend. Three, it’s a healthcare stock, a sector we are light in and one that should stay above water in the coming economic downturn.

National Healthcare runs nursing homes, assisted living facilities, independent living facilities and homecare programs primarily in the Southeastern USA and is also involved in rehab and pharmacy services.

When looking at service businesses such as NHC, I scan the reviews of employees to get a feel for the “culture” of the company. Employees had both good and bad things to say about the company and I had my doubts at first.

Then I read reviews of several competing companies and came away with the feeling that this is a very tough business. NHC seems to handle it as well as possible and better than most competitors. As such, I have decided to add the stock to our model portfolio.

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