REIT + Health Care = Hot Stock
Here is a current chart of this ETF:
In addition to this red-hot sector, the REIT sector is also under heavy accumulation. Investors who are not happy with a 10-year Treasury yield of 1.5% and CDs that are currently paying next to nothing are venturing out and seeking yield.
Last year, it was the high-paying large-caps that benefited from this feeding frenzy. This year, one of biggest beneficiary of investors seeking yield is the REIT stocks. I wrote about three such stocks back in early May here on the TheStreet.com
An ETF that track the U.S. REIT sector, streetTRACKS Dow Jones Wilshire Reit Fund(RWR) , is now up 13.5% on the year. Remember, this is against a backdrop of a Standard & Poor's 500 that is up just 6.4% for the year.
Here is a current chart of this REIT exchange-traded fund:
Now, what if we can find a stock that combines both the health-care sector and the REIT sector into one nice package, and offers a healthy dividend yield of 5%?
Well, let's give it a shot...
The name of the stock is Health Care REIT(HCN) . Wow, that's a good start! All the right names are present. Headquartered in Toledo, Ohio, the company invests in health-care and senior housing facilities in 46 states.
Market capitalization is a very respectable $12.8 billion and the stock, in my opinion, is suitable for investors seeking income first and capital appreciation second
I just love a little growth along with my dividends! I hate investments that just pay income and have never delivered any capital appreciation.
Let's take a peek at the average total returns of this stock over the years: