National Health Investors: Shelter from the hurricane

National Health Investors (NYSE:NHI), headquartered in Murfreesboro, Tenn., is a real estate investment trust — more commonly known as a REIT — that invests primarily in income-producing healthcare properties with emphasis on the long-term health care sector.

REITS have great tax benefits for shareholders and an operating model that can generate a liquidity surplus. They are also required to distribute roughly 90% of earnings to shareholders.

What makes National Health particularly attractive is its concentration in health care-related real estate. The company’s entire portfolio is made up of properties such as medical office buildings, residential projects for the developmentally disabled and long-term care facilities. Unlike the demand for shopping malls or condominium complexes, the demand for health care never dwindles and is not significantly affected by economic downturns. The current economic downturn might actually be a boon for doctors, particularly those in the business of treating stress-related maladies. As long as there are doctors, hospitals and treatment facilities, there will be a demand for the real estate they occupy. Owning and leasing those types of properties is National Health’s business.

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