One way around this would be for me to load up on a few of the best real estate investment trusts. This would help to diversify my portfolio and may provide some protection against a correction or market crash. 

Reliable tenants

My first pick of the best real estate investment trusts to buy now is Primary Health Properties (LSE: PHP). This company owns purpose-built facilities which it leases out to GPs and government bodies. 

Unsurprisingly, rental income is about as predictable as it gets. Occupancy rates are also very high, at 99.6%. I can’t see this falling in the aftermath of the pandemic either. In fact, Covid-19 has served as a reminder of the importance of providing access to appropriate healthcare outside of hospitals.

Sure, PHP will never shoot the lights out. The share price has climbed a little under 50% since 2016. That’s clearly far less than I could have made elsewhere, highlighting arguably its biggest drawback.

Then again, massive gains aren’t the objective here. This is primarily a vehicle for protecting cash. It’s also a great income play. Right now, analysts have PHP yielding 3.7%. 

Hot property

Another option if I were looking for downside protection, at least in my view, is Tritax Eurobox (LSE: EBOX). If the name rings a bell, that’s because the much larger, UK-focused Tritax Big Box is currently knocking on the door of the FTSE 100. 

EBOX specialises in what might be regarded as ‘hot property’ at this point in time, namely warehouses. Thanks to the huge growth seen in e-commerce (and supported by the pandemic), retailers are crying out for more logistics space to hold their stock. This has helped send the share price more than 30% higher over the last year. 

Yes, an economic slowdown may put an end to this momentum as people tighten the purse strings. Even if this doesn’t happen, we could see more money being spent on experiences as opposed to possessions for a while.

However, I doubt this will hold back EBOX for long. And at around a £750m market cap, the company has a lot of space left to grow. The shares also yield 3.5%, as I type. 

Inflation-linked income

I think we can all agree that supermarkets are pretty defensive businesses. Since we all need to eat, it makes sense that cautious investors might want some exposure to this space.

If I didn’t want the hassle of picking a winner out from the pack, I could buy Supermarket Income REIT (LSE: SUPR). It aims to provide owners with inflation-linked income as well as capital appreciation over time. It does this by investing in omnichannel stores — large supermarkets that also operate as fulfilment centres for customers wanting home delivery and the option to click and collect. Its chief customers are the UK’s ‘big four’: market-leader Tesco, Sainsbury, Asda and Morrisons.

Will this approach deliver greater gains than investing in one of the companies mentioned above? Probably not. However, SUPR does boast a super forecast yield of 4.9%.

Like PHP and EBOX, I think this makes it one of the best real estate investment trusts to buy now. 

The post 3 of the best real estate investment trusts to buy now appeared first on The Twelfth Magpie.

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• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• £10,000 in either of these FTSE 250 gems could net around £800 in passive income. But which to pick?
• 1 REIT could turn a £20,000 ISA into annual passive income of £1,580
• With yields of 8.4% and 7.9%, are these FTSE 250 shares perfect for a Stocks and Shares ISA?

Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Morrisons, Primary Health Properties, Tesco, and Tritax Big Box REIT. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Tritax Big Box

First up is warehouse provider and FTSE 250 member Tritax Big Box (LSE: BBOX). With a portfolio value approaching £4bn, tenants include top tier stalwarts Next and Unilever as well as US giant Amazon. 

Thanks to Covid-19 showing yet again just how convenient/essential online shopping has become, I find it hard to be anything but bullish on Tritax’s share price over the long term. A looming recession may force many to tighten their purse strings temporarily, but the e-tail boom clearly has a lot further to go. 

And dividends? Right now, this real estate investment trust yields a chunky 5.1%, based on analyst estimates of a 6.72p per share payout in 2020. For context, only five companies in the FTSE 100 are yielding more (and I suspect one of these — BP — will need to cut at some point).   

Big cash returns, solid growth prospects: What’s not to like?

Primary Health Properties

The second real estate investment trust I think should remain a good pick for income investors, particularly after the last couple of months, is Primary Health Properties (LSE: PHP). As you may have guessed, this company invests in the freehold or long leasehold of primary healthcare facilities.

PHP’s portfolio currently consists of 510 properties, the vast majority of which are GP surgeries. Other assets are let out to NHS organisations, dentists and pharmacies. Importantly, nearly all of the rental income is backed by the government. This should give investors far more confidence that payouts will be maintained compared to elsewhere in the market.  

Unsurprisingly, a stampede for relatively ‘safe’ income havens means that the shares currently trade on a hefty premium to their net asset value. Notwithstanding this, I think buying now can still be justified based on the non-cyclical nature of its business. The likelihood that demand for healthcare will only grow due to an ageing UK population is also a big draw.

PHP currently yields 3.8%, which puts it roughly on par with a stock like Tesco. Speaking of which…

Supermarket Income REIT

The days of panic-buying toilet paper are long gone. However, the coronavirus crisis has still succeeded in highlighting just how defensive investing in the UK’s supermarkets can be. My third and final pick from this area is, therefore, Supermarket Income REIT (LSE: SUPR). 

The £500m trust rents out property to FTSE 100 titans Sainsbury’s, Morrisons and the aforementioned market-leader, Tesco. Walmart-owned Asda is also a tenant. 

In SUPR’s view, the fact that supermarket property yields have climbed in recent years is a reason to get involved. The trust aims to buy property in highly-populated residential areas, with strong transport links. An average lease of more than 15 years is also sought. Combined, these should give investors a stable source of income that rises with inflation.

SUPR is likely to return 5.8p per share in this financial year (ending June 30). Based on the current share price, this gives holders of this real estate investment trust a forecast yield of 5.4%. 

The post Want dividends? I like these top real estate investment trusts appeared first on The Twelfth Magpie.

More reading

• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• £10,000 in either of these FTSE 250 gems could net around £800 in passive income. But which to pick?
• 1 REIT could turn a £20,000 ISA into annual passive income of £1,580
• With yields of 8.4% and 7.9%, are these FTSE 250 shares perfect for a Stocks and Shares ISA?

Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Primary Health Properties and Tritax Big Box REIT. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

In poor health

It was briefly a constituent of the FTSE 100, but with its share price down 60% in the last three years, it now languishes in the FTSE 250 with a market-cap of £2.7bn.

The Mediclinic share price is up 2% today after markets smiled on its 2020 half-year trading update. Group CEO Dr Ronnie van der Merwe reported an encouraging performance with trading in line with expectations, as it expands across all three of its divisions.

He also highlighted good revenue growth, broadly stable margins in Switzerland, patient volumes in line with expectations at Mediclinic Southern Africa, and “continued gradual improvement” in the Abu Dhabi business.

Road to recovery

The group’s problems were down to impairment charges totalling £262m on its UK and Swiss businesses, which struggled with government regulation and increased competition, even as its South African and Middle East operations reported steady revenue growth. Yet private healthcare is a relatively defensive market and investors have been looking for an opportunity to buy back into the growth story.

Given its troubles, I would have expected the Mediclinic share price to be trading at a wider discount and just 13.5 times forecast earnings. The forecast yield is just 2.1%, although nicely covered 3.4 times, giving scope for growth. Earnings are predicted to fall 4% this year, but the future looks brighter as City analysts reckon they could climb 11% next year.

It is well worth keeping an eye on Mediclinic, but I wouldn’t rush to buy it today. Especially when there are so many exciting stocks on the FTSE 250 at the moment, including this little gem picked it by my fellow Fool writer Alan Oscroft, which also operates in the healthcare sector.

In rude health

Earlier this month, Alan wrote that Primary Health Properties (LSE: PHP) offers a tempting combination of strong share price growth and high dividends. The growth has been eye-popping, up 30% in the last year, and almost 70% over years.

The £1.67bn company invests in healthcare real estate in the UK and Ireland, which it lets out on long-term leases backed by a secure underlying covenant, with the majority of rental income funded either directly or indirectly by a government body.

The primary healthcare real estate sector is typically less cyclical than other parts of the property market, which makes Primary Health Properties surprisingly low risk, given recent soaraway growth. I can see why Alan admires it.

Low risk, high price

Last month, it launched a share placing to raise £75m to fund further expansion, as it sees attractive investment opportunities in building larger GP primary care centres. This is on top of the £60m it has already committed to fund the acquisition and development of eight medical centres, and £70m on other medical centres as it looks to boost the number of assets in its portfolio.

Today, it offers an attractive forward yield of 4%. Earnings growth looks steady at a forecast 10% this year, and 7% next. There is one downside, though. Alan isn’t the first to spot an opportunity here. The stock is a little pricey at 23.7 times earnings. Sometimes you have to pay for quality…

The post £1,000 to invest? I’d buy this FTSE 250 income stock, but approach another with caution appeared first on The Twelfth Magpie.

More reading

• £10,000 in either of these FTSE 250 gems could net around £800 in passive income. But which to pick?
• 1 REIT could turn a £20,000 ISA into annual passive income of £1,580
• With yields of 8.4% and 7.9%, are these FTSE 250 shares perfect for a Stocks and Shares ISA?
• 8% dividend yield! This REIT could be a BIG winner after Keir Starmer’s resignation
• With an 8.5% dividend yield, is this cheap income stock a no-brainer?

Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended Primary Health Properties. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

However, things have changed. House price inflation has stalled, and rising tax and costs mean net rental yields are materially lower than in earlier times.

Today, I’d prefer to buy shares in stock market property companies where I see not only higher potential returns, but also the opportunity to diversify across different sub-sectors of the property market.

Diversification

Arguably, buy-to-let remains economically attractive for large-scale professional operators, as opposed to small amateur landlords. If you believe this is the case, you may want to consider shares in Residential Secure Income and PRS REIT. Both companies specialise in this area.

For diversification into other areas, Primary Health Properties (LSE: PHP), which has increased its dividend every year for over two decades, and NewRiver REIT (LSE: NRR), which currently sports a yield of 11.1%, are two stocks I’d be happy to buy. Let me tell you more about them.

Reliable core holding

Primary Health’s record of annual dividend increases since its flotation in 1996 reflects its focus on a non-cyclical market. It invests in modern primary health facilities in the UK and Republic of Ireland. Its properties are let on long-term leases, backed by a secure underlying covenant where the majority of rental income is funded directly or indirectly by a government body.

Last week, the company raised an additional £100m from investors, having seen an increase in the number of opportunities for funding new developments. At the same time, it reiterated its intention “to maintain its strategy of paying a progressive dividend that is covered by earnings in each financial year.”

In July’s interim results, management had signalled a dividend for the full year of 5.6p per share, a 3.7% increase on the 2018 payout. At a current share price of 132.6p, this would give a yield of 4.2%. It’s not the highest around, but I think it’s one of the most secure, providing a reliable core holding for a stock portfolio.

High-yield pick

NewRiver owns 33 community shopping centres, 23 conveniently-located retail parks and over 650 community pubs across the UK. Retail is a bit of a struggling sector, but NewRiver, which was founded in 2009, hand-picked its assets with a focus on the faster-growing and resilient sub-sectors of grocery, convenience stores, value clothing, health & beauty and discounters.

The company paid a dividend of 21.6p per share last year. At the current share price of 194.4p, this gives a yield of 11.1%. Now, when a yield is this high, it indicates the market is pricing in a risk of a reduced dividend in future. NewRiver’s payout last year was only 84% covered by underlying funds from operations (UFFO), a measure of cash profits.

However, management is confident about its strategies for increasing profits, and of “first re-establishing full cover and then growing the dividend in the future in line with UFFO.” On this front, I think news last week of property disposals at a blended net initial yield of 5.4%, with the proceeds recycled into acquisitions with a 9% yield, is highly encouraging.

Finally, the stock market currently offers attractive dividends across a range of other sectors. This means investors have the opportunity to further diversify their streams of passive income.

The post Forget buy-to-let! I’d go for a passive income from these property stocks appeared first on The Twelfth Magpie.

More reading

• £10,000 in either of these FTSE 250 gems could net around £800 in passive income. But which to pick?
• 1 REIT could turn a £20,000 ISA into annual passive income of £1,580
• With yields of 8.4% and 7.9%, are these FTSE 250 shares perfect for a Stocks and Shares ISA?
• 8% dividend yield! This REIT could be a BIG winner after Keir Starmer’s resignation
• With an 8.5% dividend yield, is this cheap income stock a no-brainer?

G A Chester has no position in any of the shares mentioned. The Motley Fool UK has recommended Primary Health Properties. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Three stocks from the FTSE 250 I’d happily buy for a retirement portfolio are Primary Health Properties (LSE: PHP), Close Brothers (LSE: CBG) and NextEnergy Solar (LSE: NESF). Let me explain why I believe these stocks are highly attractive for income seekers.

Clean bill of health

Primary Health Properties (£1.5bn market cap) has increased its dividend each and every year for the last 22 years. This is a superb record, and actually puts many FTSE 100 companies to shame.

The group owns primary health facilities in the UK and Republic of Ireland. The majority are GP surgeries, with other properties let to NHS organisations, pharmacies and dentists. Long-term leases, most income backed by government, and high occupancy rates are features of the business. These features go a long way to explaining why PHP has been able to build such an impressive dividend record, and why it has every prospect of continuing to deliver a reliable rising income in the future.

The company pays dividends quarterly, in February, May, August and November. At a share price of 131p, with the next four payouts forecast to total 5.7p, the prospective first-year yield is 4.35%.

A bank to bank on

Close Brothers (£1.9bn market cap) is a leading UK merchant bank. It has built a well-deserved reputation as a prudently-managed business. Notably, it was able to maintain its dividend through the financial crisis when other banks were slashing or suspending their payouts.

The firm’s record makes it one of the few banks I’d be happy to buy and hold for income at any point in the economic cycle. Indeed, its dividend yield is particularly attractive at the present time, due to Brexit worry weakness in shares across the banking sector.

Close Brothers pays an interim dividend in April and a final dividend in November, the final one generally being around double the interim. I’ve cautiously pencilled in 43p for the next final and 22p for the following interim. At a share price of 1,257p, the 65p total gives investors a prospective first-year yield of 5.17%.

Sunny money

Investing in renewable energy infrastructure has moved into the mainstream in recent years. Widespread public and political support for a cleaner future, and technological advances, have made this an attractive area to invest in. NextEnergy Solar (£700m market cap) is an investment company that meets this demand.

It joined the stock market in 2014, and has built up a portfolio of 87 solar power plants on agricultural, industrial and commercial sites. The majority are in the UK, but it’s also acquired eight in Italy. Its aim is to increase its annual dividend by UK RPI inflation, and it’s done this each year since its flotation.

Dividends are paid quarterly in September, December, March and June. The board is targeting a payout of 6.87p for the upcoming four quarters, giving investors today, at a share price of 120.5p, a prospective first-year yield of 5.7%.

In my opinion, Primary Health, Close and NextEnergy are worthy candidates for inclusion in a diverse portfolio of income stocks. The average yield of the three is just over 5%.

The post 3 FTSE 250 dividend stocks I think are ideal for retirees appeared first on The Twelfth Magpie.

More reading

• £10,000 in either of these FTSE 250 gems could net around £800 in passive income. But which to pick?
• 1 REIT could turn a £20,000 ISA into annual passive income of £1,580
• With yields of 8.4% and 7.9%, are these FTSE 250 shares perfect for a Stocks and Shares ISA?
• 8% dividend yield! This REIT could be a BIG winner after Keir Starmer’s resignation
• With an 8.5% dividend yield, is this cheap income stock a no-brainer?

G A Chester has no position in any of the shares mentioned. The Motley Fool UK has recommended Primary Health Properties. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

That said, there are some areas of the UK property market that do offer investment appeal right now, in my view. Here’s a look at one property investment I would be happy to put my money in at present.

Healthcare property

Primary Health Properties (LSE: PHP) is a niche property company that owns and leases a large portfolio of modern, purpose-built healthcare facilities to government healthcare providers and GP practices. Much of its property portfolio is let to NHS organisations which is a real plus for investors, as the ultimate rent guarantor is the UK government.

A Real Estate Investment Trust (REIT), the company is listed on the London Stock Exchange and is a member of the FTSE 250 index.

20% gain in six months

So far this year, Primary Health Properties has been a brilliant investment, as the stock has risen over 20% (smashing the returns from buy-to-let). However, looking at the company’s interim results today, I think there could be plenty more growth to come. With net rental income for the six months to the end of June surging 43.9% on the same period last year, and adjusted EPRA earnings per share increasing by 12%, PHP appears to have significant momentum at the moment.

Dividend appeal

One of the things I like about PHP is its dividend. Not only is the yield very healthy at 4.2% (that’s higher than a lot of buy-to-let rental yields) but the company also has a good track record of increasing its payout, having now notched up eight consecutive full-year dividend increases. Analysts are expecting the dividend to continue growing in the near term too, meaning the stock could be a cash cow for long-term investors.

Brexit protection

Additionally, I like the fact that the company is well placed to benefit from the UK’s ageing population (as people age, their demand for healthcare services increases) and that it shouldn’t be impacted by Brexit at all. In today’s results, the group advised: “The final outcome and consequences of Brexit for the UK are unlikely to have a direct impact on the primary health centres we invest in, which perform a vital role in the provision of healthcare across the UK and Ireland.”

Valuation

PHP is not the cheapest stock around. With analysts forecasting earnings per share of 5.7p for FY2019, the forward-looking P/E ratio is 23.6, which is relatively high. However, to my mind, that valuation is not a deal-breaker. For a company that has strong momentum, is well placed to prosper in the years ahead due to powerful demographic trends, and offers a 4%+ dividend, I think that’s a reasonable price to pay. Overall, I see the stock as a far more attractive investment than buy-to-let property right now. 

The post Forget buy-to-let! I’d buy this UK property investment appeared first on The Twelfth Magpie.

More reading

• £10,000 in either of these FTSE 250 gems could net around £800 in passive income. But which to pick?
• 1 REIT could turn a £20,000 ISA into annual passive income of £1,580
• With yields of 8.4% and 7.9%, are these FTSE 250 shares perfect for a Stocks and Shares ISA?
• 8% dividend yield! This REIT could be a BIG winner after Keir Starmer’s resignation
• With an 8.5% dividend yield, is this cheap income stock a no-brainer?

Edward Sheldon has no position in any shares mentioned. The Motley Fool UK has recommended Primary Health Properties. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

I believe the three FTSE 250 stocks you’ll read about in this article fit the bill. I reckon they’re capable of delivering steady and sustainable annual earnings and dividend growth in the mid-to-high single-digit region, and I’d be happy to buy them in May and hold them for the long term.

Healthy prospects

When it comes to steady and sustainable growth, Primary Health Properties (LSE: PHP) is an outstanding candidate. This specialist real estate investment trust is focused on primary medical assets in the UK and Republic of Ireland.

These assets are local hubs, housing GP surgeries, pharmacies and other medical services. Occupancy is consistently close to 100%, over 90% of rental income is government backed, and most of the rents are subject to fixed or inflation-linked uplifts. This low-risk, non-cyclical backdrop has enabled Primary Health to deliver 22 years unbroken dividend growth.

When I last wrote about the company, it had agreed an all-share merger with smaller peer MedicX. I viewed the deal favourably, and expected shareholders of both firms to back it, which they subsequently did.

A recent post-merger research report by Hardman & Co forecasts average annual earnings growth of over 10% for the next two years, with average annual dividend growth at a little over 4%. Hardman suggests the earnings growth trend will feed through to accelerating dividend growth at some stage. Buyers of the stock at 131p today should secure an initial dividend yield of 4.3%.

Powering ahead

I expect most readers have used a National Express (LSE: NEX) coach at some point in their lives. What you may not know is that the company’s international expansion means it also carries many bus and coach users in North America, Spain and Morocco, and rail users in Germany. In fact, over 80% of the group’s operating profit now comes from outside the UK.

City analysts see average annual earnings growth of over 5% for the next two years, with average annual dividend growth of 8%. Earnings expectations could be upgraded, as the company continues its strategy of winning new contracts and making strategic acquisitions, such as the recently announced acquisition of a majority stake in Silicon Valley’s premier employee shuttle company WeDriveU.

National Express has a prospective 4% initial yield for buyers of the shares at a current price of 410p.

Gold star

Gold miner Polymetal International (LSE: POLY) is forecast to deliver average annual earnings growth of near 9% for the next two years, with average annual dividend growth just into double figures. Rising production is expected from 2020, and with the company’s focus on operating performance and costs, the stage looks set, as my Foolish colleague Royston Wild recently wrote, for profits to keep rising well into the next decade.

Buyers of the stock at 805p today should bag an initial dividend yield of 5.2%.

As with many precious metals miners, there’s some geographical concentration and geopolitical risk in terms of where Polymetal’s assets are located: namely, Russia and Kazakhstan. Investors could mitigate this by going for a half-holding with another dividend-paying gold miner in a different part of the world, such as Egypt-based Centamin.

The post 3 FTSE 250 dividend stocks I’d buy in May appeared first on The Twelfth Magpie.

More reading

• £10,000 in either of these FTSE 250 gems could net around £800 in passive income. But which to pick?
• 1 REIT could turn a £20,000 ISA into annual passive income of £1,580
• With yields of 8.4% and 7.9%, are these FTSE 250 shares perfect for a Stocks and Shares ISA?
• 8% dividend yield! This REIT could be a BIG winner after Keir Starmer’s resignation
• With an 8.5% dividend yield, is this cheap income stock a no-brainer?

G A Chester has no position in any of the shares mentioned. The Motley Fool UK has recommended Primary Health Properties. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

If you’re clued up on this, and are looking for some last-minute buys to stash into your stocks portfolio, then I think you could do a lot worse than to buy into these FTSE 250 dividend heroes. Come take a look.

A defensive dynamo

Primary Health Properties (LSE: PHP) is a company in great shape to deliver strong profits, and thus dividend, growth in the near-term and beyond, I believe.

Why? As a major provider of healthcare facilities in the UK its services remain in high demand irrespective of the state of the economy. And because of the rapid ageing of the domestic population at the present juncture, City analysts are predicting handsome profits growth through the next couple of years at least. These bright forecasts mean that dividends are predicted to keep sweeping higher as well. A full-year reward of 5.6p is anticipated for fiscal 2019, a figure that yields a juicy 4.6%.

If you’re not convinced by Primary Health Properties’s investment case, though, a quick glance at its most recent financials might win you over. The business reported a 19% year-on-year improvement in EPRA earnings during 2018 which rose to £36.8m.

And following its planned all-share merger with MedicX — a move that will create an industry leviathan sporting 479 properties straddling the UK and the Republic of Ireland — the company will be even better placed to benefit from growing government investment in primary healthcare facilities.

A smart choice

Unite Group (LSE: UTG) is another FTSE 250 share that’s I’d very happily buy ahead of the forthcoming ISA deadline.

I can understand why the university accommodation provider might not be everyone’s cup of tea because of concerns over how Brexit will impact the flow of student numbers from abroad. The political hot potato that is immigration means that many big questions affecting the further education arena, like the future of the Erasmus cross-border study programme in the European Union, are still to be solved in the cauldron of Westminster.

I’m not too concerned, though. UK universities have been desirable places to study for centuries for students across the globe, and I cannot see how Britain’s status as one of the academic go-to destinations will either be compromised or dulled.

And nor can City analysts, certainly not in the medium term, who are expecting annual earnings at Unite to keep growing by double-digit percentages through the next couple of years at least. And with good reason. The business commented just this week: “Our strategy of aligning to the best universities and providing good-quality, value-for-money accommodation for resilient segments of the market reinforces our long-term confidence in the business.”

Reflecting its confidence, Unite hiked the full-year dividend 28% year-on-year to 29p per share, and the number crunchers are expecting another hefty upgrade in the current fiscal period to 33.4p. This projection yields a fat 3.7%, and I am confident that the firm can continue to offer up market-mashing dividends long into the future.

The post ISA investor alarm! I’d top up my savings with these FTSE 250 dividend stocks appeared first on The Twelfth Magpie.

More reading

• £10,000 in either of these FTSE 250 gems could net around £800 in passive income. But which to pick?
• 1 REIT could turn a £20,000 ISA into annual passive income of £1,580
• With yields of 8.4% and 7.9%, are these FTSE 250 shares perfect for a Stocks and Shares ISA?
• 8% dividend yield! This REIT could be a BIG winner after Keir Starmer’s resignation
• With an 8.5% dividend yield, is this cheap income stock a no-brainer?

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Primary Health Properties. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

These are highly attractive economics, which just aren’t available to the average buy-to-let property investor. And that’s why I’m recommending PHP, as well as some of its close peers, as a replacement for traditional buy-to-let. 

Higher returns 

Returns from buy-to-let investing have been falling for years. Recent government regulation, coupled with changes to the tax regime, which directly affect landlords, has only accelerated the slide. These changes have severely dented the appeal of buy-to-let investing, in my opinion. 

Luckily, there are plenty of stocks out there with similar qualities to buy-to-let without all the hassle. PHP is a great example. The company manages a portfolio of healthcare facilities around the UK and Ireland. Similar to the deal outlined above, most of these properties are rented out to government agencies, with multi-decade agreements.

At the end of December 2018, PHP’s property portfolio was worth 105p per share, up around 5% year-on-year. The annualised contracted rent roll increased 9.8% during the year and occupancy hit 99.8%, which I think highlights the quality of the group’s property portfolio. The stock currently yields 4.8% and should rise steadily over the long term as rental income grows with inflation.

Development pipeline 

Assura Group (LSE: AGR) is another strong healthcare real estate investment trust (REIT). Last year, this company invested £175m in new healthcare facilities through the acquisition of 45 medical centres and completion of two developments. The weighted average unexpired lease length of this portfolio is 14.6 years. In total, the company now owns 553 medical centres across the UK with a total rent roll of £100m.

More investments and developments are planned. The group is currently considering around £170m of opportunities to add to its portfolio. At the same time, management is divesting properties that don’t meet its returns criteria. This active portfolio management gives me confidence that Assura can both grow its dividend and net asset value in the years ahead. The stock currently supports a yield of 4.8% and has a net asset value of 52.7p per share.

Government support 

Another part of the property market that interests me is in student property and it looks as if demand here won’t slow down anytime soon. But investing directly can be costly, and management levels are intensive. That’s why I like the look of Empiric Student Property (LSE: ESP), one of the largest public-traded  groups in the UK sector. The company does all the work of managing the properties for investors and all they have to do is pick up their regular dividend cheques. 

City analysts have Empiric paying out 5p per share for 2018, rising to 5.03p for 2019. At the current share price, these figures give a dividend yield of 5.1% for the next two years which, in my opinion, is a much more attractive rate of return than investing in buy-to-let, especially when you don’t have to lift a finger to manage these properties. At the end of June 2018, the company’s net asset value per share was 105.5p so, right now, the stock is trading at a discount to its asset value. 

The post Forget buy-to-let. Here are 3 property stocks I’d buy instead appeared first on The Twelfth Magpie.

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• £10,000 in either of these FTSE 250 gems could net around £800 in passive income. But which to pick?
• 1 REIT could turn a £20,000 ISA into annual passive income of £1,580
• With yields of 8.4% and 7.9%, are these FTSE 250 shares perfect for a Stocks and Shares ISA?
• 8% dividend yield! This REIT could be a BIG winner after Keir Starmer’s resignation
• With an 8.5% dividend yield, is this cheap income stock a no-brainer?

Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended Primary Health Properties. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

I’ve long been bullish on real estate company Primary Health Properties (LSE: PHP). Back in the summer of 2017, I named it as a stock I’d buy and hold forever. And as recently as December, it was one of my three top FTSE 250 dividend picks for 2019 and beyond.

However, on 24 January, the company made an announcement of significant importance for its future. It said it had agreed an all-share merger with fellow healthcare property firm MedicX. Under the terms of the merger, existing shareholders of PHP would hold 69.4% and MedicX shareholders 30.6% of the enlarged group.

Now, a little less than a year ago, I wrote rather scathingly of a similar proposed all-share merger in the real estate sector between retail property groups Hammerson and Intu. Should I be equally negative about PHP’s deal with MedicX, or do I still see it as a stock to buy and hold forever?

Strategic rationale

One of reasons I was unimpressed by Hammerson’s proposed deal was that the company had been strategically reducing its exposure to the UK in favour of Europe. Its acquisition of Intu would have represented an inexplicable and unwise U-turn, in my view, significantly upping its exposure to the UK.

As a contrast, PHP’s proposed acquisition of MedicX is entirely consistent with its existing strategy. And the two companies’ portfolios are highly complementary.

Balance sheet matters

Intu’s elevated debt would have markedly weakened Hammerson’s financial position. Indeed, the company anticipated embarking on a disposal programme of at least £2bn, in order to strengthen its balance sheet and provide liquidity to reinvest in higher return opportunities. Finding buyers for £2bn+ of less-than-prime assets in a challenging retail property market didn’t sound a particularly straightforward matter to me.

PHP’s acquisition of MedicX has a less material impact on the strength of its balance sheet. And there’s no mention of any planned asset disposals post-merger.

Cost savings and financing optimisation

I criticised Hammerson’s deal for its relatively low quantified cost savings, and reckoned potential optimisation of the enlarged group’s borrowing arrangements was the primary attraction. I think PHP’s deal is similar on this score, although I calculate its quantified costs savings — pound for pound — are a little better than those Hammerson had hoped to realise.

Still positive

Under pressure from some of its major shareholders, Hammerson’s board ultimately backed out of the deal with Intu. But I believe shareholders of PHP will back their board, that MedicX’s shareholders will also likely be supportive, and that the deal will go ahead.

I view it favourably myself, for the relatively positive reasons discussed. In addition, execution risk appears limited, with the unification of property management under PHP’s existing property manager being the main source of the quantified cost synergies.

Operating in an area of the real estate market in which the income stream is particularly secure and predictable, PHP looks more than capable of extending its record of 22 years of annual dividend increases. At a share price of 116p, with a prospective yield of 4.8%, it remains a stock I’d be happy to buy today and hold ‘forever’.

The post Why I’d still buy and hold this FTSE 250 dividend stock forever appeared first on The Twelfth Magpie.

More reading

• £10,000 in either of these FTSE 250 gems could net around £800 in passive income. But which to pick?
• 1 REIT could turn a £20,000 ISA into annual passive income of £1,580
• With yields of 8.4% and 7.9%, are these FTSE 250 shares perfect for a Stocks and Shares ISA?
• 8% dividend yield! This REIT could be a BIG winner after Keir Starmer’s resignation
• With an 8.5% dividend yield, is this cheap income stock a no-brainer?

G A Chester has no position in any of the shares mentioned. The Motley Fool UK has recommended Primary Health Properties. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.