Canadian buyers would possibly take a look at a dividend inventory down on its luck and assume it’s greatest to keep away from. However that’s not essentially at all times the case. In truth, there are a lot of dividend shares on the market that, as a substitute of being prevented, needs to be purchased in bulk.

That’s why at the moment we’re going to have a look at NorthWest Healthcare Properties REIT (TSX:NWH.UN). This dividend inventory affords huge earnings and, after going by way of a tough patch, is nearing its place again on the high.

Money coming in

The largest concern for NWH over the previous few years has been whether or not the dividend inventory can maintain its dividend. And rightly so, given it was sliced in half a few years again. And a yr in the past, the adjusted funds from operations (AFFO) payout ratio was above 100%, and that’s undoubtedly not sustainable for a dividend inventory.

But quick ahead to the second quarter of 2025, and buyers can see that the ratio is dropping, now right down to 88%. Meaning its distributions are actually coated by recurring money stream. Moreover, same-property internet working earnings (NOI) grew 2.8% yr over yr, exhibiting that the portfolio is now producing natural rental development as properly. With occupancy at 97% and a median lease expiry of 13.5 years, NWH affords dependable, long-term money stream.

Decrease prices

Not solely is NWH enhancing its money positions, however it’s turning into a extra environment friendly dividend inventory as properly. NWH has been recycling capital aggressively. Throughout 2025, it raised $231 million from asset gross sales. This features a stake in Assura for over $200 million. This helped scale back its leverage to 48.5% of its gross e book worth from 50%.

Moreover, the dividend inventory renegotiated a credit score facility to 2027, chopping borrowing prices by about 65 foundation factors. Now it has about $230 million in liquidity, with most debt mounted at 4.8%. This brings the danger of upper curiosity prices, squeezing money stream down. Plus, the 7% dividend yield is way extra sustainable than it has been in years.

Nonetheless beneficial

But regardless of all this, the current share value of $5.20 at writing trades at simply 0.81 instances e book worth. Due to this fact, this can be a clear low cost to its acknowledged internet asset worth (NAV). Administration continues to purchase and promote properties at cap charges that suggest values which can be larger than the present share value. And for buyers, meaning getting in on high-quality healthcare actual property for a steal.

And don’t ignore the sector. Healthcare actual property is necessary, from hospitals and medical workplaces to clinics and even parking garages. These are high-quality properties that stay defensive and received’t immediately vanish throughout a recession. Due to this fact, you’re getting in on earnings safety and upside as sentiment improves.

Backside line

Altogether, NWH appears like a stellar dividend inventory that’s solely enhancing. In truth, should you had been to take a position $7,000 within the dividend inventory proper now, you can herald $485 annually, or $40.41 each month!

So, whereas some dividend shares may be greatest to keep away from, NWH appears like a constructive dividend inventory that’s one to observe, particularly because it continues to enhance its backside line.