Welltower Inc (NYSE:WELL) has declined 12% in the past three months, and that could be great news for dividend investors as the stock’s dividend yield is now up to 4.4%.
What makes the stock an attractive buy for income investors is the stability that it offers. Welltower has low volatility and while it has only risen 11% over the past year -- nowhere near the Dow Jones, which has soared 22% -- it can be a safe stock to hold heading into tougher economic times.
The company invests in organizations that provide senior housing as well and other health-care-related companies, giving them the capital that they need to grow and expand their businesses.
As money tightens up in the economy, Welltower’s services, and capital, could be in significant demand in the near future. Healthcare is generally going to be a much more stable investment than other sectors of the economy. And it’s been showing on Welltower’s financials as the company has generated free cash flow of $1.6 billion in the trailing 12 months.
The company’s Chairman and CEO, Thomas J. DeRosa, plans to take advantage of all that cash, stating in Welltower’s most recent earnings release that “We continue to use our cost of capital advantage to invest in the next generation of health and wellness care delivery assets and remain optimistic regarding our ability to source and complete accretive opportunities in the future.”
Welltower is coming off another strong performance in Q3 that saw its net income rise to $648 million, thanks in large part to a gain on real estate dispositions totaling $570 million. However, even before the boost, the company’s operating income of $78.4 million was a solid 29% improvement from its prior-year tally of $60.9 million.
The stock currently trades at 28 times earnings and a price-to-book multiple of 2.1.
