I stand by my choice of Senior Housing Properties Trust as good bet for long term income generation, despite the thumping the stock took last week (down a bit over 2.5% on Friday. Since I’ve been on vacation the past week, I didn’t offer a fresh dividend pick on Friday, Aug. 10, so I’ll just add a few thoughts about last week’s pick and settle into finding something fresh for next Friday.

Any stock with nearly a 9% dividend yield has some risk attached to it, and Reuben Gregg Brewer, writing for the MotleyFool, does a good job of sorting out the management and economic risks that have held SNH back relative to some of its senior housing and medical property peers. Here’s a link to the MotleyFool article. He compares SNH to HCP, finding HCP more attractive because of its more appealing risk profile. I’d add Welltower, another health sector REIT with a relatively low debt load and attractive risk profile as an alternative to SNH for investors who are concerned about SNH’s relationship to the company that manages its portfolio or its heavy dependence upon on a single tenant.

Like HCP, Welltower offers a dividend yield above 5%, but that’s still far shy of SNH’s nearly 9% yield.

 

 

 

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