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Assisted Living REIT
Returns +47%
Published: September 29, 2008
This
is a tough time for many income investors. With the global equity
markets in turmoil, traders have been scurrying to the shelter
of U.S. Treasuries -- so much in fact, that yields on the
3-month T-Bill have sunk to a microscopic 0.45%. Even a 3-year
Treasury bond only pays an anemic 1.90%. That's down about a
quarter-point since this time last month.
In these times, wouldn't it be nice to find a security
with a reasonable payout backed up by stable cash flow and free from
the problems plaguing the consumer and financial services
sectors? Such securities really do exist, but they can be tough
to find. Fortunately,
High-Yield Investing editor Carla Pasternak knows
right where to look.
In her May 2006 newsletter, for example, Carla gave a promising
diagnosis for LTC Properties (NYSE: LTC, $28.66), a real
estate investment trust with an attractive portfolio of nearly
200 nursing homes and assisted-living facilities. As you might
expect, rental and investment income tied to those properties
has little to do with the issues impacting other areas of the
economy.
At the time, the stock was trading at just 11 times earnings and
offered a healthy yield of 6.6%. And with plenty of opportunity
to boost rental income and make acquisitions in the fragmented
market, Carla saw good things ahead for LTC. She made the company her top pick in the REIT
market.
Today, the company has a much larger portfolio. It has generated
operating income of nearly $16 million year-to-date. And, as a
real estate trust, at least 90% of the firm's income goes right
back to shareholders. LTC is now dishing out steady monthly
distributions of $0.13 per share, for a generous yield of 5.5%
-- low-yielding compared to many of the securities Carla covers,
but nearly triple the payout on a 3-year Treasury bond.
Better still, since Carla's initial profile, the shares have
climbed from $21.93 to Friday's close of $28.66 for an
impressive total return of +47%.
In this month's newsletter, Carla returns to the real estate
category, this time targeting companies specializing in
lucrative "triple-net" leases. These long-term contracts
typically cover periods of 20 years or more and most contain
clauses stipulating built-in rate increases -- which usually
lead to a stream of steadily rising rental income. Is it any
wonder that this corner of the market has put up an average
return of +8.2% during the past year, while the S&P 500 has sank
almost -20%?
Carla has just unveiled her five favorites, each of which has
just boosted its payout and now offers a yield of 6.2% or
better. To see the names of each of these five standouts, we
invite you to try out our
High-Yield Investing newsletter.
Follow this link to learn more.
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Nathan Slaughter
StreetAuthority Staff Writer
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Income Security
of the Month
If you're looking for
high yields, monthly payments and unprecedented safety from your
investments, then you need to learn more about our "Income
Security of the Month" for November 2008. This stable
preferred stock has a long
track record of paying some of the most solid dividends in Wall
Street history. In fact, the preferred issue pays a monthly dividend
totaling 10.3% annually
and has
outperformed the S&P 500 by more than +44 percentage points over the last
year!
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Top
10 Stocks for 2008!
Since we began publishing this report back in 2003, the picks we've
featured have consistently beaten the broader market -- delivering average
gains of +21.3% per year and outperforming the S&P by a nearly
2-to-1 margin. Act now to reserve your copy of our newest report -- Top
Ten Stocks for 2008. |
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