Protect Your TFSA: A Little-Known REIT to Buy Right Now

NorthWest Health Properties REIT (TSX:NWH.UN) is one of the best performers of the year. Here’s why income investors ought to double-down on the name.

| More on:

The market roller coaster ride could be on the cusp of becoming that much more gut-wrenching as new tariff announcements continue to dictate the trajectory of stocks. The tit-for-tat U.S.-China spat looks nothing short of bleak, and as U.S.-Mexico tensions heat up once again amid Trump’s latest tariff threats, investors ought to be prepared to roll with the punches as we head into the latter part of the year.

While it’s never a good idea to time the market, it can only be prudent to mitigate your risk and reduce your TFSA portfolio’s magnitude of volatility such that you won’t be put into a spot that’d force you to make a rash decision like selling after a day of triple-digit losses. Fortunately, President Trump has been using the stock market as a gauge of his success, which bodes well for contrarians looking to buy on the dip as we inch closer to an election year.

With our own set of concerns on this side of the border, most notably depressed WCS prices, it’s tough to be bullish on Canadian stocks in times of economic warfare. While there are plenty of deep-value names on the TSX index that possess considerable margins of safety, there are also very vulnerable names that could blow up in your portfolio. In this piece, we’ll have a look at a little-known REIT that belong to the former category.

Enter NorthWest Health Properties REIT (TSX:NWH.UN), a 6.63%-yielding owner and operator of health properties, including hospitals, doctor’s offices, clinics across Canada, Australia, New Zealand, and Germany. The REIT has been on an absolute tear this year, surging 28% year to date and leaving most stocks and the TSX index in the dust.

While the name has been garnering significant momentum in the first half of the year, shares still aren’t exactly what you’d deem expensive, especially when you consider the generational industry-wide tailwind that the REIT is slated to enjoy over the coming decades.

The aging Baby Boomer population bodes well for the demand for health properties, and as the company continues to bolster its property portfolio, I do see a scenario in which AFFO could swell at an above-average rate over time to support generous distribution albeit infrequent hikes.

In a prior piece, I highlighted the fact that NorthWest was not only an attractively valued REIT, but also a REIT that combined a perfect combination of agility and stability — perfect for any prudent investor’s TFSA.

If you’re looking to build your wealth gradually over time with a fundamentally sound firm and would rather not trade your way in and out of stocks in these highly uncertain times, NorthWest is the horse to bet on.

Stay hungry. Stay Foolish.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joey Frenette has no position in any of the stocks mentioned. NorthWest Health Properties REIT is recommendation of Stock Advisor Canada.

More on Dividend Stocks

Dividend Stocks

The 2 Best Canadian Blue-Chip Stocks to Buy Now

Blue-chip stocks can be some of the best stocks to have in any portfolio. But when they're trending upwards, investors…

Read more »

Canadian dollars in a magnifying glass
Dividend Stocks

Here Are My Top 3 Dividend Stocks to Buy Now

These top dividends stocks have consistently paid and increased their dividends. Further, this trend will continue.

Read more »

dividends can compound over time
Dividend Stocks

Want a 7% Yield? The 3 TSX Stocks to Buy Today

These TSX stocks are offering high yields of over 7%, making them attractive for investors seeking steady passive income.

Read more »

how to save money
Dividend Stocks

The Smartest Dividend Stocks to Buy With $200 Right Now

These smartest dividend stocks can consistently pay and increase their dividends in the coming years, irrespective of the macro uncertainty.

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

3 Utility Stocks That Are Smart Buys for Canadians in November

These utility stocks benefit from regulated businesses and generate predictable cash flows that support higher dividend payouts.

Read more »

Start line on the highway
Dividend Stocks

Invest $10,000 in This Dividend Stock for $600 in Passive Income

Do you want to generate passive income? Forget the rental unit! This option will save you the mortgage yet still…

Read more »

Senior uses a laptop computer
Dividend Stocks

1 Reliable Dividend Stock for the Ultimate Retirement Income Stream

TD Bank (TSX:TD) shares are way too cheap with way too swollen a yield for retirees to pass up right…

Read more »

A worker drinks out of a mug in an office.
Dividend Stocks

Is Brookfield Infrastructure Partners a Buy for its 4.75% Yield?

Brookfield Infrastructure Partners (BIP) has a 4.75% dividend yield. Is it worth it?

Read more »