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These 7.5% Dividends Are
Set to Double from the
Shift in U.S. History
Three companies are already raking in huge profits from this unstoppable mega-trend. Payouts will increase annually for the next 30 years, plus
15% gains expected in the next 12 months!
Fellow Income Investor,
No matter what the Fed does with rates from here, or how GDP grows in the coming years, there’s one sure economic bet in the U.S…
The country will be older in the future than it is now.
There’s a bull market unfolding as Americans get older, and it will run for at least two or three decades. Here’s what’s driving profits in the America-is-getting-older trend:
- 77 million Baby Boomers, born between 1946 and 1964, make up nearly 28% of the entire US population.
- We’re living longer than ever before thanks to healthier choices and advances in medical technology. That means the 65+ population will double and the 85+ population will triple in the coming years.
- Americans over 65 are three times more likely to be admitted to a hospital, and for longer periods of time and for more expensive types of care.
By 2024, national healthcare expenditures are expected to climb $5.43 trillion, or about 20% of GDP. This colossal spending will be driven in large part by the increasing demands and expectations of the massive Boomer demographic.
Over the next few minutes, I’m going to tell you more about this – and three companies perfectly positioned for huge yields for the next thirty years. But first, a bit about myself…
My name is Brett Owens and I’m an unabashed dividend investor. Ever since my days at Cornell and all through my years as a startup founder in Silicon Valley, I’ve hunted down safe, stable, meaningful yields.
For the last 10 years, I’ve been investing my startup profits and finding 6%, 7%, even 8%+ dividends with plenty of double-digit gains along the way.
I haven’t been this excited about an income opportunity in years. The trend grows stronger daily because…
10,000 Baby Boomers Turn 65 Every Day
According to social security eligibility, 3.6 million baby boomers are now reaching full retirement age every single year. That’s 10,000 boomers every day, or 416 every hour… or one every 9 seconds. And this trend will continue every single day for the next 15 years.
Remember how baby boomers drove the U.S. economy the first time around?
- During the generation’s infancy in the 1950s, makers of baby products recorded record profits thanks to their wares flying off the shelves.
- As teenagers, they plowed $20 billion into the U.S. economy yearly. The recorded music they loved and clothes they bought made their manufacturers (and shareholders) rich.
- They fueled the unprecedented economic growth of the 80s as they made their presence felt in the workforce.
- They also single-handedly funded the U.S. home construction industry for decades, from the 1960s through the boom of the 2000s.
In 1960, just before the boomers started buying homes, one-quarter of Americans lived in the suburbs. By 2000, one-half called the ‘burbs home.
Now, as boomers begin the transition en mass into retirement, spending patterns will transition as well.
The Bull Market in 65+ Healthcare Will Continue for Decades
Older adults spend 5-times as much on healthcare as other adults. They visit physicians offices 2.5-times more than other adults.
Also, those 65 or older are spending 3-times as much time in a hospital than their counterparts 45-64 years of age, on average.
More 65+ Means More Hospital Days
These additional hospital days aren’t free, of course. They’re driving annual expenditures higher by 5-6% annually.
U.S. Hospital Care Expenditures to Grow 6% Annually
You don’t see much about this trend on mainstream investing sites for some reason. Maybe it’s not sexy enough. But that suits us contrarian income investors just fine.
With the S&P 500 yielding just 2.5%, we can secure yields averaging 7.5% or better simply by buying this unstoppable trend.
I like two avenues the best – skilled nursing facilities, and hospitals. There’s no scenario you can draw up for the future that doesn’t heavily involve both types of providers.
And the economics for those running both types of facilities today are better than you’d ever imagine.
Believe it or not, as early boomers move out of their suburban homes and into retirement communities, they don’t have many viable options when increased levels of care are required.
SNF Supply is Actually Decreasing as Demand is Booming
Skilled nursing facilities, or SNFs, provide the highest level of care an older adult can receive while still living independently. Whether its for a long-term stay, rehabilitation following a surgical procedure or to manage a specific medical event, residents generally get their own room, their own bed, and a private bathroom.
While demand for SNFs is heading steadily up, supply—surprisingly—is constrained. Many states limit new SNF construction. As a result, there are now 94 fewer U.S. facilities than there were in 2008:
SNF Supply is Actually Decreasing
When rental markets tighten, rents rise. The average annual cost for one resident in a SNF is $50,000 and climbing. Fortunately only one-third of residents must pay this out of pocket.
A Renter’s (and Landlord’s) Dream: Sugar Daddy Uncle Sam
AARP reports that Medicaid picks up the monthly tab for two-thirds of SNF residents. Medicaid is the well-known federal and state health insurance program for people with low income. The government prefers to direct Medicare and Medicaid funding to SNFs because they’re the most cost-effective option for care (including for those recovering from a serious medical event):
Skilled Nursing Facilities are Comparative Bargains
Rising demand, government-restricted supply, and access to Uncle Sam’s pocketbook means the rent will keep going up. It’s a great business to be in – which is what attracted me to my first two favorite healthcare plays.
Healthcare Income Buy #1 Pays 6.6%
Firm #1 has increased its dividend by 138% over the last decade. I have no doubt it’ll continue to boost its payouts at a similar breakneck pace over the next decade – thanks to the demographic megatrend that it’s riding, and the capital efficiency of its business model.
The company owns more than 900 properties in 41 states, making it the leading investor in skilled nursing facilities in the U.S. And it doesn’t have to worry about actually running the facilities it owns. Instead, it partners with the leading operators in the space and shares in the consistent profits.
You see, the healthcare operators themselves lease space for their practices from this firm and fulfill the patient services. Our firm, in turn, works with these tenant-businesses to boost profitability and cash flow.
The result? Firm #1 collects fat royalty checks month after month!
And these royalty checks go straight into the pockets of its investors. The firm has increased its payout for 13 consecutive quarters and counting…
The dividend growth is being powered by good old fashioned cash flow growth. Revenues have risen 20% year-over-year for the last 3 years.
The good times should continue for years, as this highly fragmented industry is consolidating – with firm #1 likely to be a big winner. A full 84% of all skilled nursing facilities will be “up for grabs” in the years ahead.
That’s $103 billion in properties not yet spoken for. As the market leader, we can expect that firm #1 will speak for many of them – and the profits from these new facilities will power dividend growth for years (and probably decades) to come.
Healthcare Income Buy #2: The Upstart Competitor Pays 8.9%
Firm #2 is the second-largest player in the fragmented space with 355 properties that include skilled nursing, senior housing and specialty hospitals.
It’s a recent spinoff from a larger (and very well respected) company also in the healthcare industry, which is why it’s still flying under the proverbial radar. But that’s about to change, as a major investment bank just initiated analyst coverage on the new company.
Legendary mutual fund manager Peter Lynch, who earned a 29% annualized rate of return from 1977-1990, loved investing in spinoffs exactly like this one. He wrote in his book One Up On Wall Street:
“Large parent companies do not want to spin off divisions and then see those spinoffs get in trouble, because that would bring embarrassing publicity that would reflect back on the parents. Therefore, the spinoffs normally have strong balance sheets and are well prepared to succeed as independent entities.”
Indeed, our second healthcare income buy has a clean balance sheet, and generates over $230 million in annual operating cash flow. It entered the world on its own with just $1.4 billion in outstanding loans versus real estate valued above $2.6 billion – an excellent ratio – and it picked up another $2.7 billion in cash from issuing shares at the spin.
Firm #2 pays an amazing 8.9% dividend and I see no point in choosing between these two stocks. Both have the same great business model, and both can continue to grow and dominate this market.
That’s why I recommend buying both stocks and collecting these big dividends.
I believe both will see their stock prices appreciate by at least 10-15% this year. Which means, if you buy today, you’re locking in secure gains of 17% or better.
And you’ll see at least 6.6% to 8.9% of that in cold hard cash via the dividends. Nevermind the growth of those payouts – which should help you achieve 10%+ yields within a few years on your initial purchases.
Before I tell you how to get the names and tickers of these companies, let me share the third play in my “healthcare income trio.” This company pays a rock-solid 7%, and it’s a direct play on the booming hospital business.
Healthcare Income Buy #3: The Only Financing Option for Hospitals Pays 7%
Until several years ago, pure mortgage financing didn’t exist for hospitals. And traditional corporate loan packages would typically force hospitals to lock up all of their asset value as collateral.
Our third healthcare income play stepped into the void, and today it’s the largest financier to hospitals in the U.S.
Now it doesn’t actually run the hospitals – it invests in them. The company provides capital to the operators, particularly proven ones. They, in turn, use the money to improve their facilities, upgrade their technology, hire more staff, and expand their complex.
Operators like partnering with this company because they get to keep running the show. It, in turn, earns a return on its investment capital. It’s a capital efficient business, so most of that gets passed directly to investors – it pays a 7% yield today (yes, you read that correctly).
The dividend payout is already growing by 5% annually, and this growth is likely to accelerate as the company’s skyrocketing cash flow drops straight into the pockets of its investors. The firm has already
- Increased its asset base by 332% since 2011…
- These assets produced an 82% increase in cash flow over the same time period…
- The dollars dropping to the bottom line are accelerating – the firm saw a 30% year-over-year increase in revenue in 2015…
- And the latest acquisition spree – $1.5 billion in 2015 – will continue to increase value for shareholders in 2016.
With a current payout ratio below industry averages, and accelerating future cash flow growth dropping straight to the bottom line, I wouldn’t be surprised to see dividend growth rate climb into the high single-digits.
This means, if you buy today, you’ll be earning a 10%+ yield on your initial investment in almost no time.
And we’re talking about recession-proof income here. Like skilled nursing facilities, hospitals are an absolute necessity. And we’ll need a lot more of them as the 65+ population doubles and 85+ population triples over the next three decades.
In fact, once the boomers have settled into retirement, it’ll be Generation Next’s turn. And thanks to the boomers all having kids, there are even more “Next-ers” – 81 million to be precise. And they’ll be retiring steadily until 2050.
Millions of Americans Are Retiring Every Year Until 2050
Now, we’re not the only contrarian investors sniffing around this neck of the woods…
George Soros Bought Bigger Players
in the Space in Q3
Legendary investor George Soros – co-founder of the Quantum Fund, which returned 4000% to investors in the 1970s – just declared in November that he bought some of the bigger players in the space we’re discussing.
Unlike you and I, Soros has a “problem” that limits him to the big dogs and doesn’t let him purchase the under-the-radar companies that I prefer. You see, he has so much money under management that he needs to put a significant chunk of it to work on any investment.
The 3 companies we’re looking at are too small for him to buy big chunks of.
Fortunately, unless you have $6 billion or so to deploy, you can take advantage of the better bargains and buy the smaller companies that Soros would love to buy if he could.
Remember how Warren Buffett famously said he’d make 50% annually if he could toss around “only” a few million dollars at smaller companies?
Well these companies may not net you 50% annually, but they’ll hand you double-digit dividends in no time.
7.5% Dividends and 15% Gains in 2016
It’s only a matter of time before other income investors ditch their paltry 2% and 3% payers and find their way over to these recession-proof issues.
Which means the best time to buy for the highest yield AND price appreciation is right now. As we’ve already discussed:
- 77 million Baby Boomers – about 28% of the U.S. population – have made major economic waves at every turn in their lives.
- Demand is already on the rise for SNFs, hospitals and extended care, and is expected to grow exponentially over the next 30 years.
- Our healthcare income trio taps into the massive profit potential with an average 7.5% yield right now, plus 15-20% price gains in 2016 alone.
Of course it’s up to you to decide if this strategy is right for your portfolio once you’ve had a chance to review all the details.
That’s why I’ve prepared an in-depth guide on all three of my favorite healthcare plays called “Endless Income: 3 Healthcare Picks for 30 Years of 10%+ Dividends.”
Inside you’ll find the ticker symbol, my buy-up-to price and in-depth backstory on each stock, including:
- The 6.6% payer that’s raised its dividend by 138% over the last decade…
- A recent spinoff with an amazing 8.9% dividend that’s expected to appreciate 10%+ in 2016…
- A rock-solid 7% payer with accelerating dividend growth rate.
You’ll understand the rationale behind where, why and how to profit. It’s everything you need to know about these companies before you invest a single penny.
Here’s How to Get Your Copy Right Now
To access your copy of Endless Income: 3 Healthcare Picks for 30 Years of 10%+ Dividends at no cost, I simply ask that you take a risk-free trial of my research service, The Contrarian Income Report.
I created The Contrarian Income Report to help self-directed investors uncover overlooked and under-appreciated income plays before Wall Street and the mainstream herd bid them up.
Every investment I recommend pays 6% or better, including three funds in our portfolio that each deliver over 8% dividends right now – and it pays out monthly.
As I write this, my five favorite “best buys” are paying between 6% and 9% and our entire portfolio sports an average yield of 7.4%!
Meanwhile, the S&P 500 pays a meagre 2.5% on average, and the 10-year Treasury bond barely 2%. Most investors could double – or even triple – their income overnight!
7.5%+ Dividends Are Only the Beginning
In addition to my three favorite healthcare plays for 7.5% yields, your risk-free trial includes a whole lot more…
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Now, the regular member price to join The Contrarian Income Report is $99 per year.
With everything that’s included I’m sure you’ll agree it’s well worth the cost.
Even a small position in just one of the companies I’ve mentioned above will easily cover that in just the first few months.
Imagine 7%, 8% and 9% dividends rolling in from my top healthcare plays, and then watch them double as demand explodes in the coming years.
Healthcare spending is projected to rise to $5.43 trillion by 2024, and few companies are as well positioned to deliver consistent, growing income right now and for the next 3 decades.
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This report is my personal playbook for uncovering the very best income stocks.
This report is my personal playbook for uncovering the very best income stocks.Many super-investors agree that you’ll never beat the market by following the herd. They tout the virtues of contrary thinking, but I’ve yet to hear any one of them specifically outline how they go about finding under-appreciated stocks with low valuations.
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In the coming months, many investors will still be on the sidelines, holding their breath for the next signal from Washington on the state of the economy, fearful of what might happen in China & Europe, or still waiting for commodities to turn around.
In the meantime, our healthcare income trio will shower shareholders with 7.5% average dividends and 15% gains in 2016. And our other Contrarian Income Report portfolio plays will continue delivering additional 6%, 7%, even 9%+ yields to subscribers.
Are you ready to join us?
Yours in profits,
Chief Investment Strategist
The Contrarian Income Report
P.S. Since my recommendations are contrary to prevailing popular beliefs, they have a habit of rallying quickly as soon as the Wall Street crew realizes they are missing out. I encourage you to get started right now so that you can get into these plays at a good price.