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Ready for Retirement: 3 Health Care REITs That Outperform

The Health Care REIT Report Cards are looking good and I especially like these three REITs that have outperformed the others (over the last 30 days). It doesn't hurt the fact that as I recommend all of these REITs, the shares are continuing to build a dominate total-return record.

Let's start with Medical Property Trust (MPW - Get Report), a "pure play" hospital landlord that I recommended here.

The Birmingham-based REIT has returned more than 11.5% during the past 30 days.

That's not bad. But hang on.

MPW, with a market cap of $1.942 billion, has returned more than 58.5% over the last 12 months. Shares are trading at $14.25 and the BB (S&P rated) REIT has a dividend yield of 5.61%.

The big monthly gainer is Omega Healthcare Investors (OHI - Get Report). The long-term care REIT returned more than 13.74% in the last 30 days and a boastful 38.91% over the last 12 months. With a market cap of $3.119 billion, OHI has a modest valuation (P/FFO is 14.5) with shares trading at $27.75. Just a shade under investment grade (SP is BB+), OHI has the highest dividend yield in the sector, at 6.49%.

Finally, the "new kid" just made it on the leader board. Health Care Trust of America (HTA - Get Report), a pure-play medical office building REIT, has returned more than 10.68% in the last 30 days. The Scottsdale-based REIT listed on the NYSE on June 6, 2012. Last week the company hit an all-time high of $11.68 per share. In just six months (since listing), HTA has retuned more than 26% and the company now has more analysts covering it (and more to follow).

No more flying under the radar for HTA, as the $2.422 billion REIT pays a healthy dividend yield of 5.09%. (HTA is the only investment grade REIT of the three mentioned in this article. S&P rates HTA BBB-).

The above Health Care REITs are excellent candidates for your "sleep well at night" portfolio. In fact, I strongly recommend these three REITs by diversifying and even spreading your risk across tenant, property type and geography. To be properly diversified, I would not recommend that you limit your exposure to one, but instead me mindful that there are a broad number of REITs (129 U.S. equity REITs) with a full spectrum of disciplines. It is essential that diversification become a part of your DNA and perhaps any or all of these three Health Care REITs could be a part of your overall retirement portfolio.

Best of luck.
The Intelligent REIT Investor.

Source for Data: SNL Financial

At the time of publication the author had no position in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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