This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Nursing Homes Cry All the Way to the Bank

NEW YORK ( TheStreet) -- My mom turned 90 yesterday, so I'm in California celebrating the fact instead of being in my Georgia office. (The picture below was taken in January, when my nephew became an Eagle Scout.)

Mom's been lucky. She still lives in the home she bought with my dad 40 years ago. My brother rebuilt it in the last decade so it's better than ever, and she's gotten to watch her grandchildren grow up in it.

While she has had brief stays in rehabilitation facilities over the last years, she has stayed out of nursing homes, and I consider this the greatest blessing of all.

Nursing home companies like nothing better than bemoaning their fate. Many have been converted into real estate investment trusts, or REIT, in the last few years, under names like Ventas (VTR), Senior Housing Properties Trust (SNH) and, the largest of them all, Health Care REIT (HCN), which closed on the acquisition of Sunrise Senior Living early this year.

The new style of ownership seems to suit them. Senior housing is up 16% in the last year and yields 5.81% in dividends. HCN is up 11% this year and yields 4.51% in dividends. Ventas is up 9% and yields 3.78%.

Despite this, The Wall Street Journal wrote in May that other health care companies are shunning the group fearing steeper cuts to Medicare which, this time, might actually cut into profits.

Families for Better Care, a patient's advocacy group, calls the sector's profits "staggering" despite Medicare cuts that, in 2011, had the industry "reeling" and preparing to "cut expenses," according to National Real Estate Investor.

My good friend Martin Bayne, who has been in nursing care since 2002 due to Parkinson's, now runs the Voice of Aging Boomers from a facility near Allentown, Pa., and has lived the nightmare of nursing care.

After being interviewed by Terry Gross of Fresh Air last year, Martin told The New York Times early this year that new residents need a "welcoming committee" that will get them to reveal their passion, and jobs in the facility, even if it's just welcoming others, that return them a measure of dignity.

In the journal Health Affairs, Martin has written that nursing home companies have "a top-down management team whose initial goal seems to be to strip us of our autonomy," noting that most of his neighbors enter care after a terrible trauma, the loss of a spouse, a terrible disease or the onset of full-scale dementia.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
AAPL $125.41 1.80%
FB $82.80 -0.60%
GOOG $549.49 0.21%
TSLA $183.15 -1.00%
YHOO $44.93 -0.38%


DOW 17,978.28 +265.62 1.50%
S&P 500 2,080.95 +19.93 0.97%
NASDAQ 4,926.9510 +35.7320 0.73%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs