Daily Stock Pick: Senior Housing Property Trust

This week, I'm looking for a second stalwart healthcare sector representative for my new Ivy portfolio.

That healthcare sector includes ten industries all related to testing, diagnosing and treating what ails us. Healthcare industries are: biotechnology; diagnostics & research; drug manufacturers - major and - specialty & generic; healthcare plans; long-term care facilities; medical care; medical devices; medical distribution; medical supplies.

Today I'm reviewing a mid-cap healthcare facilities real estate investment trust, Senior Housing Properties Trust Its trading ticker symbol is SNH.

Senior Housing Properties Trust is a real estate investment trust. It owns and operates independent living and assisted living communities, continuing care retirement communities and nursing homes throughout the United States. SNH is managed by the operating subsidiary of The RMR Group Inc. (Nasdaq: RMR), or RMR Inc., an alternative asset management company that is headquartered in Newton, MA.

I use three key data points to gauge the value of any dividend equity or fund like Senior Housing Properties Trust:

(1) Price

(2) Dividends

(3) Returns

Besides those three, four more keys will finally unlock an equity or fund in which to invest. But those first three primary keys, best tell whether a company has made, is making, and will make money.

SNH Price

SNH's price per share was $11.94 at yesterday's market close. A year ago its price was $19.22 for a price drop of $7.28 per share for the year, or a 37.9% annual tumble.

Assuming SNH's stock will trade in the range of $9 to $21 next year, SNH's recent $11.94 price could recover by $0.58 and grow to $12.50 by late-December, 2019.

SNH Dividends

SNH's most recent monthly dividend was $0.39 declared October 18th and paid out, November 15th. That $0.39 quarterly stipend equates to an annual amount of $1.56 yielding 13% at yesterday's closing $11.95 price.

Gains For SNH?

Adding the $1.56 annual estimated dividend to my estimated $0.58 annual price upside estimate for Senior Housing Properties Trust (SNH) totals up to a $2.14 potential gross annual per share gain, which will be reduced by costs to trade the shares.

For a little over $1,000.00 invested today at the $11.95 recent price, we could buy 84 SNH shares.

A $10 broker fee paid half at purchase and half at sale costs us $0.12 per share.

Subtract that $0.12 brokerage cost from the estimated $2.14 gross annual gain leaves a net gain of $2.02 X 84 shares = $169.68 for a 16.8% net gain on a $1,003.80 investment.

Therefore, Senior Housing Properties Trust whose trading ticker symbol is SNH now shows a possible 16.8% net gain including a 13% dividend yield.

Eight brokers cover this stock: Two brokers say "buy" SNH

Three brokers says "hold" SNH shares.

One broker says SNH will "underperform" peers.

Two brokers say "sell" SNH.

The eight covering brokers are more optimistic for GEO's price recovery than I am. They strike a median price upside at $14.58 next year. Which, you will recall, is $2.08 higher than my $12.50 estimated one year target.

Therefore, you can look at Senior Housing Properties Trust and see it has made money, is making money, and could rise to net a 15% to 20% net annual gain including that 13% estimated dividend yield. It could be more, it could be less.

The above speculation is based on past year performance. The actual results remain to be seen to determine if Senior Housing Properties Trust is worth your time and money.

This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, recommendation ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.