Stockchase InsightsNorthwest Health Prop Real Est Inv TrustNWH.UN.TOHOLDMay 15, 2023

New CEO came from Brookfield and has turned the company around. Selling assets to concentrate in NA. Healthcare is a growing business. Yield is now over 6%, one of the better yields in the market.

Interesting mix of assets. Medical offices in Canada, hospitals and such in Europe, NZ, and Australia. Took on a lot of debt, paid a big dividend, and then it all didn't work out very well. Management got replaced, new management doing a good job.

Now much leaner. Curtailing footprint and driving synergies. Likes international footprint because of long-dated leases with inflation escalators. Canadian leases are more short-term. "OK" at this price, but not a screaming buy. Rumours of a takeover. You could buy for the dividend, but he'd wait for a pullback. Don't expect much price appreciation.

As did many companies, had to refinance its debt in 2022, going from 1-2% to 5%. That was a big headwind. Had to do a fire sale on some assets. Now stabilized. NAV is ~$7.50-8 per share. New CEO taking action to realize underlying value of the company. 

A recent Top Pick, so he really likes it. Great entry point. Not a lot of economic sensitivity. Paying down debt, buying back stock and bonds. Yield is ~7%.

A turnaround story. Had grown too far, too fast, too much leverage. Now, there's new management. Is a show-me story. Can they sell foreign businesses and focus on North American assets. Expect a lot of churn, but more positive.

Lost their way from original Canadian investment model when it went overseas. For a mid-cap stock to be successful, you have to do one thing and do it well. Wouldn't touch it until it exits foreign operations entirely.

Hospital and medical offices around the globe, very strong assets, some with 10- or 20-year leases. Hit hard in 2022 with higher interest rates on too much debt. Replaced CEO. One of the cheapest REITs on the market. 

Chairman owns about 10% of the stock, just through open-market purchases. He likes management that puts their own $$ in. Yield is 7.10%.

(Note the short timeframe.)  A lower-beta, higher-dividend choice for the summer when risks were higher than usual.

Note that he'll probably be out of this soon, see if it swings up over the next few weeks and then exit.

Show-me story. New management tasked with a much-needed overhaul. Quality assets, but in disparate geographies globally. May exit some of them to focus on Canada and US. Earnings growth may be delayed.

Lower beta, boring for this time of year. Two overlooked sectors in one -- healthcare and REITs. Steady eddy. Should probably hold its own between now and the fall, when he'll probably exit. Collect the dividend, might go up a couple of bucks, better than cash. Decent yield of 7.34%.

It is caught up in the interest rate environment. Pays a 7 1/2% dividend and is in the defensive healthcare space. Has long term leases with rent escalators built in. Debt is down and cash flow up. The payment ratio is very sustainable. This will be the first earnings call for the new CEO.

Not very focused geographically, so all those moving parts are hard to maintain. Likes some changes they've made with management and the balance sheet, so he's watching it now. One of largest tenants in Australia has gone bankrupt, which could affect 5-10% of earnings. It's a wait and see.

Likes the space. Diversified assets globally. Capital allocation decisions caught up to them, and stock dropped in 2022. Liquidity crunch, management shakeup, new CEO set to retire. Attractive yield is in question. If you want safety, this isn't it.

Yes, in much better position today than previously. Management transition. Hard to see it going back to $10 levels anytime soon. Decent job allocating capital (ie. selling assets) to pay down debt. Enough to pay March debentures. Risk/reward not that compelling.

One of the most attractive REITs on the TSX right now. Coming out of poor fundamental operations where capital allocation was mismanaged. New CEO cut dividend, sold properties. Prepared either way if interest rates fall or rise. Payout ratio will fall closer to 80%. Stock may have fallen recently because that new CEO is retiring next year. Yield is 7.3%, one of the highest out there.

Balance sheet's really under pressure, making progress with repairing. Management shakeup, but now the new CEO's leaving in 2025. Lots of heavy work to do. Only for those with high risk tolerance. More compelling opportunities elsewhere.