Canadian investors might look at a dividend stock down on its luck and think it’s best to avoid. But that’s not necessarily always the case. In fact, there are many dividend stocks out there that, instead of being avoided, should be bought in bulk.
That’s why today we’re going to look at NorthWest Healthcare Properties REIT (TSX:NWH.UN). This dividend stock offers massive income and, after going through a rough patch, is nearing its place back at the top.
Cash coming in
The biggest concern for NWH over the last few years has been whether the dividend stock can sustain its dividend. And rightly so, given it was sliced in half a couple of years back. And a year ago, the adjusted funds from operations (AFFO) payout ratio was above 100%, and that’s definitely not sustainable for a dividend stock.
Yet fast forward to the second quarter of 2025, and investors can see that the ratio is dropping, now down to 88%. That means its distributions are now covered by recurring cash flow. Furthermore, same-property net operating income (NOI) grew 2.8% year over year, showing that the portfolio is now generating organic rental growth as well. With occupancy at 97% and an average lease expiry of 13.5 years, NWH offers reliable, long-term cash flow.
Lower costs
Not only is NWH improving its cash positions, but it’s becoming a more efficient dividend stock as well. NWH has been recycling capital aggressively. During 2025, it raised $231 million from asset sales. This includes a stake in Assura for over $200 million. This helped reduce its leverage to 48.5% of its gross book value from 50%.
Furthermore, the dividend stock renegotiated a credit facility to 2027, cutting borrowing costs by about 65 basis points. Now it has about $230 million in liquidity, with most debt fixed at 4.8%. This brings the risk of higher interest costs, squeezing cash flow down. Plus, the 7% dividend yield is far more sustainable than it has been in years.
Still valuable
Yet despite all this, the recent share price of $5.20 at writing trades at just 0.81 times book value. Therefore, this is a clear discount to its stated net asset value (NAV). Management continues to buy and sell properties at cap rates that imply values that are higher than the current share price. And for investors, that means getting in on high-quality healthcare real estate for a steal.
And don’t ignore the sector. Healthcare real estate is important, from hospitals and medical offices to clinics and even parking garages. These are high-quality properties that remain defensive and won’t suddenly vanish during a recession. Therefore, you’re getting in on income security and upside as sentiment improves.
Bottom line
Altogether, NWH looks like a stellar dividend stock that’s only improving. In fact, if you were to invest $7,000 in the dividend stock right now, you could bring in $485 each year, or $40.41 every month!
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| NWH.UN | $5.19 | 1,349 | $0.36 | $485 | Monthly | $6,998 |
So, while some dividend stocks can be best to avoid, NWH looks like a positive dividend stock that’s one to watch, especially as it continues to improve its bottom line.
