I’m interested in securing attractive dividend yields in more defensive and non-cyclical industries of the economy, asserts Bryan Perry, growth and income expert and editor of Cash Machine.
At present, the model portfolio does not hold any high-yield pure plays in healthcare, so I wanted to recommend a real estate investment trust (REIT) that has a good story and a great yield within this space.
With this optimistic outlook in mind, I’m adding a recent big winner for us that has seen its share price come down materially, even though business conditions couldn’t be better.
Global Medial REIT (GMRE) is primarily engaged in the acquisition of licensed, state-of-the-art, all-purpose health care facilities and then leasing these facilities to leading clinical operators under the long-term triple-net lease structure.
The company is taking full advantage of industry trends that are embedded for future growth. U.S. health care 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 dollar terms, health care expenditures are projected to grow from $3.0 trillion in 2014 to $5.4 trillion by 2024, representing 19.6% of GDP four years from now.
The 65+ age group is expected to double between 2015 and 2060 and the 85+ age group is expected to triple between 2015 and 2060. And changing health care trends are driving new 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, Inpatient Rehabilitation Facilities and Ambulatory Surgery Centers.
This acquisition strategy coincides with taking advantage of the aging population and the decentralization of health care. The company operates 101 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.
Let’s put this all-weather health care REIT to work for us in our Safe Haven Portfolio and collect an incredibly attractive 9.30% dividend yield.
