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Thursday December 13, 2012
Best bets in healthcare REITs
by Brian Hicks, editor The Wealth Advisory Between Omega Healthcare (OHI) and Medical Properties Trust (MPW), we have exposure to the best health care REITS on the market today. Omega Healthcare announced 3Q earnings in October, and as we expected, the numbers were good. Omega also announced a $0.02 hike to its quarterly dividend and raised its guidance for next year. Omega made a huge run this summer to a 13-year high at $25 a share, and we view the current weakness as a simple consolidation. We expect the stock to break above that $25 level before the end of the year. It is not a fast-growing company; in fact growth will only be 5% a year for the next five years. But with a forward P/E of 11, the stock is cheap. With a yield above 7%, it remains an excellent buy. After holding support at $8.70 in June, Medical Properties Trust was put back on our buy list in the July issue and it has rallied strongly. Medical Properties is one of the biggest hospital owners in the United States. It has invested $1 billion in facilities since 2010, and those investments are starting to affect both revenue and earnings. Year-over-year revenue was up 46%, and earnings jumped from $0.15 to $0.22 per share... and it should get better as 2013 earnings should hit $1.06 a share from $0.85 a share this year. With solid revenue and earnings growth on the horizon, you could easily see +20% upside for the stock over the next year — and you'll be collecting $0.80 a year in dividends to boot. Learn more about this financial newsletter at The Wealth Advisory. Related articles: 
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