The 3-month total return for most healthcare REITs has been ugly. As shown in the following chart, the group has pulled back as interest rate expectations have increased and investors have been selling “safe-haven” stocks in general. However, two mega-trends underlying the healthcare REIT group remain intact (i.e. demographics are very positive, and healthcare REITs have a relatively long runway for expansion).
In addition to reviewing these two long-term mega-trends, this article provides high-level data for more than 20 big-dividend healthcare REITs, and then highlights three specific opportunities that we believe are worth considering.
The growing population of healthcare consumers:
The first mega-trend worth considering is demographics. Specifically, there is a growing population of healthcare consumers, with immense wealth and spending power, and increasing healthcare needs with age, as shown in the following chart.
This trend may be altered by the economy in the short-term, but over the long-term it will not be stopped. And it creates a lot of growth opportunity for healthcare REITs.