Discover a Monthly Dividend Stock Offering 7% Returns

Investors seeking consistent income amid economic uncertainty may find a promising option in the form of Northwest Healthcare Properties Real Estate Investment Trust (TSX:NWH.UN). This Toronto-based open-ended real estate investment trust (REIT) focuses on healthcare properties and offers a monthly dividend yield exceeding 7%.

Stability Through Healthcare Real Estate

Northwest Healthcare operates globally, with properties located across Canada, the United States, Europe, Brazil, Australia, and New Zealand. The REIT has demonstrated resilience even during economic downturns, maintaining high occupancy rates that support stable rent collections. As of now, the stock trades at approximately $5.13 per unit, giving it a market capitalization close to $1.3 billion.

The REIT recently experienced a nearly 14% increase in stock value over the past year, reflecting its solid financial performance. The annualized dividend yield of over 7%, paid monthly, positions it as an attractive choice for income-focused investors.

Strong Financial Performance and Future Prospects

The recent growth in Northwest Healthcare’s stock can be attributed to its improving fundamentals. In the third quarter of 2025, the REIT reported a portfolio occupancy rate of 96.9%, supported by a long weighted average lease expiry of 13.4 years. The same property net operating income increased by 4.4% year-over-year, driven by inflation-linked rent increases and steady leasing across multiple regions.

Adjusted funds from operations (AFFO) for the last quarter reached $0.11 per unit, up from $0.09 per unit during the same period last year. This positive trend was primarily due to higher property income, reduced interest expenses, and lowered administrative costs. The AFFO payout ratio improved significantly to 85%, down from 99% a year prior, indicating enhanced coverage of its monthly dividend distribution.

For the latest quarter, Northwest Healthcare reported a profit of $31.2 million, a turnaround from a significant loss the previous year. This shift resulted from lower interest costs and positive property value adjustments.

Northwest Healthcare is also taking strategic steps to improve its financial position. The REIT reduced its leverage to 48.4%, down from 50% at the end of 2024, funded by asset sales and debt repayments. Furthermore, the weighted average interest rate fell to 4.9%, alleviating pressure from borrowing costs.

In addition to focusing on streamlining operations, Northwest Healthcare is working towards internalizing management at its Vital Healthcare Property Trust, which operates in Australia and New Zealand. The REIT holds approximately a 28% stake in this platform. The company is also evaluating options for its European portfolio, which could potentially yield over $300 million in net proceeds, thereby further strengthening its balance sheet.

Given these robust fundamentals, Northwest Healthcare Properties REIT stands out as a strong candidate for investors seeking reliable monthly income backed by essential real estate assets. As always, potential investors should conduct thorough research and consider their financial objectives before making investment decisions.

For those exploring investment opportunities, the Motley Fool Stock Advisor Canada team suggests reviewing a selection of their recommended stocks. While Northwest Healthcare Properties REIT is highlighted for its income potential, it is not currently listed among their top recommendations.

Investors are encouraged to stay informed and consider all factors carefully when evaluating stocks such as Northwest Healthcare Properties REIT.