Omega Healthcare Investors Inc (OHI)

[chmcnfunds]

Opinion: Ignore the Obamacare fight in Congress and buy these 5 health-care stocks

Published: July 29, 2017 8:08 a.m. ET

Plenty of reason to like health care as a long-term investment no matter what Congress does


By
JEFF
REEVES
COLUMNIST

The battle in Congress over the Affordable Care Act continues, with more debate and votes over repealing parts of the law also known as Obamacare.

Of course, it’s anyone’s guess where things will wind up. Hard-line conservatives want to repeal it (they lost one vote to do that on Tuesday night), moderates want to modify it and Democrats want to preserve it.

But that shouldn’t bother investors one whit because the bottom line is that health care is a good investment in general. Several stocks in particular are excellent buys no matter what happens on the Hill.

Consider the following:

•Every health-care company that reported results this earning season through last Friday has beaten expectations, according to the latest FactSet earnings insight, although there have been a few misses since then.

Read: HCA’s weak quarter speaks to a long-term trend: People are going to the doctor less

•For 2017, the Health Care Select Sector SPDR ETF XLV, -0.29% is up over 17% year-to-date in 2017 vs. 11% for the S&P 500 index SPX, -0.07%

•Longer term, that health-care ETF is up over 110% in the last five years vs. about 80% for the S&P in the same period.

These stats show plenty of reason to like health care as a long-term investment regardless of the short-term uncertainty because of Congress. The bottom line is that the sector is mostly recession-proof as patients put their health-care expenses before other discretionary spending, and demographic tailwinds continue to create reliable growth industrywide.

Here's the real reason why U.S. health care is so expensive
So stop sweating the fight over the Affordable Care Act and consider a long-term investment in these five health-care stocks now:

Omega Healthcare
Health-care real estate and senior living properties are as close to a sure thing as you can get right now. Thanks to the unending march of demographics, increasing numbers of older Americans are creating high demand for senior living space and rehab facilities. When you find the right company, structured as a tax-sheltered real estate investment trust REIT, it’s all the better.

That’s what Omega Healthcare Investors Inc. OHI, -0.74% offers. That, and a tremendous 7.7% dividend for investors who buy at current levels.

Amid the current fight over health-care reforms and a chance that Medicare and Medicaid payments will be reduced, some investors may have their doubts. But Omega Healthcare is not a provider itself, just a landlord, and any changes in health-care regulations are the tenants’ problem to work out. Omega operates “triple-net lease” properties, which means it isn’t liable for the three big add-ons that handcuff other REITs — taxes, maintenance and insurance. Omega quite literally just collects the rent from the health-care companies that lease from it, and that’s that.

Yes, some of the tenants’ pain can trickle down. But this company is seeing sustained growth in both the top and bottom lines, and with a juicy dividend, that risk is more than outweighed by the potential rewards.
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http://www.marketwatch.com/story/ignore-the-obamacare-fight-in-congress-and-buy-these-5-health-care-stocks-2017-07-26?siteid=yhoof2&yptr=yahoo

In @ $30.90. See if this thesis works out.

OHI