Yahoo Finance 1 Dividend Stock Down 36% to Buy Right Now
Written by Amy Legate-Wolfe at The Motley Fool Canada
Looking to make some extra cash? Then look beyond a dividend yield. There are many companies offering soaring dividend yields, true. However, that’s not all that great if you’re looking at a dividend stock that’s barely made any returns.
So today, let’s look at a dividend stock offering major value both because shares are down, but not out, and it provides that high dividend yield.
Stock to consider
It’s been quite the journey for investors in NorthWest Healthcare Properties REIT (TSX:NWH.UN). I should know, since I’ve been one of them. After investing in the stock for years, I was shocked to see the share price drop.
Of course this came from expanding too much, too soon. NorthWest stock was one of the real estate investment trusts (REIT) wanting to take advantage of lower interest rates. However, these rates then rose significantly, causing the stock to pull back.
However, the stock has since managed to get its finances under control. After years of selling core assets and refinancing debt at lower levels, it now looks like a great buy once more. And that comes down to its focus on healthcare properties.
Why healthcare?
The reason I still like NorthWest REIT even after the pullback is because of the company’s focus on healthcare properties. Northwest REIT still owns a diversified portfolio of real estate assets, including office buildings, hospitals, and even parking garages. These properties are in prime locations and generating steady rental income, which can be attractive to investors.
What’s more, all of these offer stable occupancy rates. NorthWest stock has long been able to boast high average lease agreements, around 13 years as of writing. This is excellent news as it means its current occupancy rate of 97% looks secured for around that amount as well.
This provides the company with stable cash flows that help fund the its dividend. That dividend is currently at a yield of 7.14% as of writing! What’s more, it’s looks secure after a dividend cut was used to balance the stock’s books.
Bottom line
Shares of NorthWest stock are still down, of course. In fact, the stock is down about 64% from all-time highs. However, since reporting strong earnings, NorthWest stock has started to rise back from the ashes. As of writing, shares are down 36% year to date, but up 30% since hitting 52-week lows.
So with earnings due in two weeks, now could be an opportunistic time to pick up NorthWest stock while the dividend stock is on the rise. You could see it in a newly minted, strong position, all while grabbing a 7.14% dividend yield.
It’s true, the company has had a volatile history in the recent past. But that past looks to be behind it. With that in mind, pay attention to earnings when they are released on May 14. This could be the catalyst that sends NorthWest stock even higher. And that could mean you have less of a chance to lock in this dividend stock with a high yield and high returns.
The post 1 Dividend Stock Down 36% to Buy Right Now appeared first on The Motley Fool Canada.
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Fool contributor Amy Legate-Wolfe has positions in NorthWest Healthcare Properties Real Estate Investment Trust. The Motley Fool recommends NorthWest Healthcare Properties Real Estate Investment Trust. The Motley Fool has a disclosure policy.
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