A lot of mom and pop investors have been encouraged to purchase shares in Welltower stock (WELL) over the past few years on the basis that it is “safe” real estate investment and source of regular income. If you have never encountered Welltower, it’s basically a giant collection of properties that are rented out by senior centers, assisted living facilities, and a broad array of geriatric healthcare providers.
The investment thesis for a company like Welltower tends to go like this: “This company didn’t cut its dividend during the financial crisis, the stock has increased from $6 per share in the 1970s to the $80s today, and America has an aging population so it owns the type of real estate that will benefit from an uptrend over time.”
While those appeals sound superficially enticing, there are some real issues with paying mid-$80s per share for Welltower stock today.
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