Looking for top dividend stocks offering long-term monthly income? Think of long-term sectors. And one that certainly falls into this category is the healthcare industry. And NorthWest Healthcare Properties REIT (NWH.UN) is a standout on the TSX, especially for income-seeking investors looking for a steady monthly dividend payer in the healthcare real estate space. Let’s get into why.
Solid base
NorthWest stock is currently trading at a price-to-book ratio of about 0.7, suggesting it’s undervalued compared to its asset base – thus making this a great entry point for investors who see the value in healthcare properties with global exposure.
The dividend yield on NWH.UN is compelling, sitting at approximately 7.1% based on a forward annual dividend of $0.36 per share. Real estate investment trusts (REITs) focused on healthcare tend to offer stability because healthcare services are always in demand. NorthWest’s focus on medical office buildings, hospitals, and clinics creates a layer of resilience that other types of real estate investments can’t always match.
Beyond dividends, NorthWest’s diversified portfolio gives it a solid foundation. The REIT owns 186 income-producing properties across North America, Brazil, Europe, and Australasia, totalling around 16.1 million square feet of leasable space. This global spread allows NorthWest to tap into varying healthcare systems and economies, balancing out region-specific risks.
Portfolio growth
NorthWest stock recently bolstered its portfolio’s stability with strategic leasing moves. A significant achievement was the renewal of the lease at Sabará Hospital in São Paulo, Brazil, for a 10-year term, addressing the REIT’s only major lease maturity for 2025. Early lease extensions with Rede D’Or, a leading private hospital operator, extended lease terms to nearly 24 years on two key properties in São Paulo. These lease renewals extended the weighted-average lease expiry (WALE) in Brazil to 18.2 years, with inflation-indexed rents, locking in long-term income stability for NorthWest and its investors.
Financially, NorthWest reported trailing 12-month revenue of approximately $523.9 million, an 11.1% increase year-over-year. While it posted a net loss of $394.4 million due to non-cash valuation changes, this is fairly typical for REITs that experience periodic fluctuations in property values. More importantly, NorthWest’s operational efficiency is reflected in an operating margin of 66.4, showing that the trust effectively manages its costs to sustain profitability.
One reason for optimism about NorthWest’s future is its proactive management. NorthWest’s CEO, Craig Mitchell, has announced his retirement for mid-2025, and the dividend-paying company has already started the search for a successor. Mitchell’s leadership has been marked by significant strategic growth, including global expansions and major lease deals. So the seamless transition plan is a reassuring sign for stakeholders.
Future outlook
In terms of valuation, NWH.UN is trading at a price-to-book ratio well below 1, signalling that it may be undervalued compared to the value of its underlying assets. For a REIT with such an extensive and geographically diversified portfolio, this low valuation provides a potentially lucrative opportunity for investors. A significant advantage of this stock’s current valuation is the high dividend yield, thus making it a rare find among healthcare-focused REITs.
Finally, NorthWest’s monthly dividend distribution offers investors a rare combination of liquidity and income stability. In an economic climate where traditional income sources are often volatile, the REIT’s monthly payouts are highly attractive. With NorthWest, you’re not only gaining exposure to a crucial industry. You are also securing regular income from a company positioned to benefit from long-term healthcare trends.
Bottom line
Altogether, the dividend stock presents a compelling opportunity for Canadian investors, especially those who prioritize reliable monthly income, portfolio diversification, and exposure to the healthcare sector. It’s faced some recent financial headwinds. Yet NorthWest’s strong operating margins, proactive lease management, attractive valuation, and stable dividend yield make it a solid choice, especially for those seeking both stability and growth potential in their investments.
