Time to get focused on my dividend growth portfolio for 2018. With more than three weeks of January already in the rear view mirror it’s time to make my monthly buy(s). As the market continues make new highs on a regular basis a lot of optimism about U.S. companies remains persistent. Of course, not every company or sector, for that matter, has participated in this climb. Looking at my January stock considerations I am reminded of a sector that seems to be facing a lot of near term headwinds due to interest rate hike fears. That sector… REITs, and more specifically the health REITs that also have a lot of uncertainty about policy coming out of Washington still in the mix. With that being said:
I have added to my IRA account 13.3673 shares at $59.85 for a total investment of $800.03 in Welltower Inc. (HCN). With this recent purchase my IRA account holdings in HCN now totals 74.6347 shares with a market value of $4,428.08.
It’s been a very, very long time since I added to any of my health REITs as most have performed quite well until last summer when their gradual decline began to take hold as interest rate hike fears began to grip the sector. While three or four interest rate hikes remain possible for 2018 it’s probably a safe bet to assume that the REITs will remain under pressure for the near and mid term. Of course, that simply means better buying opportunities for those willing to dip their toe into an unloved sector. Another benefit of buying into this sector is the super size yields now being offered as a result of consistent price declines.
What do you about about my recent purchase? Are any of you also considering stocks in the battered health REIT sector? Please let me know below.
Disclosure: Long HCN
I’m continuing with my index investing investment plan. 🙂
Brad – MaximizeYourMoney.com recently posted…Is It Time For An Investing Fire Drill?
Hi MYM,
That’s great. Bottom line… keep contributing to your individual stocks, index funds, real estate, precious metals, etc. Saving and investing for the future should be the goal no matter how it’s achieved. It’s far better than living beyond your means!
Sounds like a good buy DivHut – uncertainty is a great thing for accumulating stocks! It looks like many others are adding REITs to their portfolios at the moment with the share price dips. The yield on HCN looks fantastic at this price.
Hi Frankie,
For the month of January it looks like the REITs and utilities have been beaten down the most. With the dramatic price dips in the health REIT sector we are seeing yields that are quite high while still safe based on current cash flow. As long as that sentiment remains I’ll be adding to my positions in the space. Thank you for commenting.
Nice hut! Reits and utilitys have been pulling back on interest rates rising. Like you I welcome that as it lowers their price. I bought cu in the utility sector.
Nice buy
Cheers
Passivecanadianincome recently posted…Why You Should Have A Dream Board
Hi Passivecanadianincome,
That’s the right attitude to have with sectors and stocks that are unloved. I don’t see these REITs or utilities going away any time soon and will welcome lower prices and higher yields from individual stocks as long as they last. Thank you for stopping by and commenting.
I think it’s a pretty good buy DivHut. I own HCN and VTR in this space. As Passive Canadian says, REITs and some of the other more interest rate sensitive stock sectors have lagged the rest of the market here recently. They are starting to look like better values on a relative basis. Due to that, I have added to D and O over the past couple weeks. Tom
Tom @ Dividends Diversify recently posted…O My! Now I’m a Real Estate Guy.
Hi DD,
I love the panic and fear the financial media spreads. REITs are dead. Utilities are dead. Energy is dead. The dollar is dead. Industrials are dead. Fast food dead. Packaged foods dead. It’s all cycles. Stocks and sectors go up and down. Today, it’s the REITs and utilities that are unloved. To me that signals a better buying opportunity as I have a long term horizon and will gladly nibble on positions at better prices and yields. Nice buys with D and O!
I’ve never looked into Welltower but do own OHI, SBRA and VTR in the healthcare REIT space. We’re not investing outside of my 401k right now so I haven’t really been looking at individual companies. Although sticking with the unloved sectors has traditionally paid off quite nicely. I do continue to DRIP my VTR and OHI dividends though.
JC recently posted…Spotlight on 2017 | A Year In Review
Hi JC,
I always love to buy into unloved stocks or sectors. These days it looks like REITs and utilities are the odd men out. Looks like you have a solid, diversified position with the health REITs in your portfolio. Keep taking advantage of the DRIP and build up your positions automatically. Thank you for sharing your thoughts.
Nice pick DH! Good time to buy. REIT’s have taken a beating these few weeks. I recently pruchases O, but I also own OHI and MPW. Thanks for sharing! 🙂
My Dividend Dynasty recently posted…Recent Buys – Realty Income Corp (O), Con Edison (ED), Southern Company (SO) and Recent Sell – UHT
Hi MDD,
A lot of our dividend investing peers have been buying into the REIT space. All for good reason as we are seeing levels not witnessed in quite a while. A lot of near term uncertainty is giving us better buying opportunities. Thanks for sharing your pick ups.
Nice pick up Hut! Doing Work! I think they have a dividend increase coming up soon…
Hi MH,
Glad you like this recent buy. The sector still looks pretty weak going forward and while I’d like to buy more I want to make sure I don’t get too top heavy in the REITs. Thank you for commenting.
Nice pick. We haven’t contributed to our Roth, where we have our REIT holdings, in over a year. The lower prices are tempting though.
Mike at Balanced Dividends recently posted…6-Month Update: Fundrise Passive Income Review
Hi BD,
Like you, it’s been a long, long time since I added to my health REITs but after seeing them take a nice dip it was a little too tempting for me to ignore. I still like the sector a lot for the long term but no doubt interest rate hike fears and policy uncertainty is casting a dark cloud over the sector. Thank you for stopping by and commenting.
Great buy. Utilities and REITs is the sectors to look at right now 🙂 Bought some AEP and made comparison of largest utilities. You should have a look at utilities as well 🙂
Hi p2035,
You said it. The utilities also took a nice beating to start 2018. I have my eye on the health REITs but also have looked at PPL, SO and D as potential buys going forward. Thank you for sharing your thoughts.
Good buy DH. I was thinking of buying HCN but settled on VTR. Another high yield stock in the healthcare sector is NHI. I’m thinking of adding them for diversification. It’s a combination of HCN and VTR but with a lower payout ratio.
Hi TBDI,
HCN, VTR, HCP, LTC are all on my radar. Nice VTR pick up on your end. I looked at NHI a while back but never bought into that name. There are some solid picks in the health REIT sector and most are looking pretty good when compared to levels we saw just a few months ago. I think interest rate hike fears and D.C. uncertainty are overblown for the space. Thank you for commenting.
Hut –
10+ years of dividend growth with an increase, hopefully, coming this week. Well timed and I think it’s a solid time to strike while the slide is happening, for those that have strong balance sheets.
-Lanny
Hi DD,
Not that I’m an expert at timing my buys, but seeing the whole sector take a beating I felt it was a “safe” spot to nibble on some health REITs for the long term. Buy when others are selling should be everyone’s mantra. As always, I appreciate your comment.
Great buy! I’m also buying REITs in Canada. Last year, most of my purchases were REITS as well. But I’m very selective though.
Dividend Income Stocks recently posted…YouTube is Demonetizing Small Channels, Including ME!
Hi DIS,
Seems like many of us are buying REITs in general, whether it’s health, retail, industrial, etc. The whole sector has been beaten down quite hard to start the year which just gives us better buying opportunities. Thank you for stopping by and commenting.
Not currently considering this health care REIT, but I do like the idea that you bought it in your IRA. REITS are tax inefficient and, in general, are better held in a tax advantaged account verses a taxable account. Nice addition to your existing holdings Div Hut.
Dividend Portfolio recently posted…Fixed Expenses
Hi DP,
All my REITs are in my IRA for the tax benefits. Distributions from REITs are taxed as regular income which makes them less efficient than traditional qualified dividends. The REITs are still looking good to me as we close out January though I might want to look elsewhere if I feel I’m getting too heavy in the space. As always, I appreciate your comment.
Hey DH,
nice buy! – REITs went down because of overall market conditions and that presents a good opportunity in my opinion. I did the same as you – purchased some 30 additional shares of Welltower a few days ago and increased my position to 90 shares.
If you have the time you can check out my blogpost:
https://dividendsolutions.wordpress.com/2018/01/19/recent-buy-aktueller-kauf-7/
Greets
DividendSolutions
Hi DS,
Not long ago it was the consumer staples that looked really cheap. Names like GIS, HRL, SJM and the like were unloved. Before that you had energy stocks in the dumps. It’s all part of long term investing. Everything goes through a cycle. Sectors up, sectors down. Dollar up, dollar down. Oil up, oil down. Now it’s the REITs turn to be in the dumps which is why I am looking at the space. Thanks for sharing your thoughts.
DH,
I like HCN here, and the sector in general. Of all the Health REITs HCN is my favorite, even if I have received less cash from it than OHI. Still HCN is probably my 3rd favorite REIT overall, after O and WPC.
– Gremlin
Long All except WPC.
Dividend Gremlin recently posted…Recent Buy, January 2018
Hi DG,
The last few weeks I have noticed quite a few REIT buys among our peers. I still like the health REITs the most, even with all the D.C. policy uncertainty. Long term, no matter who is running the country, these facilities will be even more crucial to our society. Thank you for commenting.
It is a battered sector and offers nice income to reinvest in div growth stocks. Best of luck (and wish me luck with OHI).
Later,
DFG
DividendFamilyGuy recently posted…DFG 2017 Year End Summary
Hi DFG,
OHI seems to be another potential good pick in the space. As I mentioned in the post, it’s been a very, very long time since I bought any REITs. Seeing them at current prices and yields was a little too tempting for me to ignore. As always, I appreciate your comment.
Great purchase there DH. RESTS have been trading at nice valuation currently. Good purchase there. I dont own HCN but I recently added SKT and OHI.
Good luck.
TDK.
The Dividend Karma recently posted…Recent Buy – January (Part 1)
Hi TDK,
The REITs had a rocky start to 2018. All that means for us is better buying opportunities with more attractive yields when compared to just several months ago. Nice job buying into the sector as well. Thank you for stopping by and commenting.
I’m happy with my current REIT exposure, so I haven’t been making any purchases in this sector recently. However, I’d be tempted to add some O if it dropped below $50. I’m sure HCN will turn out to be a good purchase, DivHut, as you seem to have a knack for adding to your portfolio at a good time.
Engineering Dividends recently posted…Recent Buy – TXN
Hi ED,
Near term timing is all “dumb” luck in my opinion. I just tend to buy assets when most are selling which proves to be a pretty good method if you have a long term horizon. The REITs are still looking good as we finish up January. Thanks for commenting.