The Healthcare REIT That Pays You to Wait for Demographics

Key Points

• In less than five years, all baby boomers will be over the age of 65.

• Most of Welltower's revenue comes directly from retirees, not government sources.

• As the wealthiest generation in history, the baby boomer population will have plenty to spend on Welltower's luxurious senior housing solutions.

• 10 stocks we like better than Welltower ›

If you're looking for a reliable corner of the economy to invest in, it's hard to go wrong with senior housing. Baby boomers are the wealthiest generation in history, and every last one will be over 65 years old by 2030.

Heaps of wealthy baby boomers who can pay for senior housing without government assistance bode well for Welltower (NYSE: WELL), a leading real estate investment trust (REIT) in the senior housing space. A majority of revenue received by operators of its senior housing facilities comes from private pay sources, not Medicare or Medicaid.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Image source: Getty Images.

Welltower is growing profits by leaps and bounds

A lack of exposure to government payers allowed Welltower to record strong growth in both occupancy and rental rates in recent years. Net operating income from its senior housing segment shot up by 23.4% year over year during the second quarter.

Funds from operations (FFO), a proxy for earnings used to evaluate REITs, is expected to land in a range between $5.06 and $5.14 per share. The midpoint of the guided range implies a gain of 18% this year.

At recent prices, Welltower stock offers a measley 1.8% dividend yield, but the payout could rise quickly in the years ahead. The REIT raised its dividend payout by 10.5% earlier this year to an annualized $2.96 per share. With FFO expected to climb to $5.10 per share at the midpoint of management's guided range for 2025, there's still plenty of room to increase the quarterly payout further. Adding some shares to a diversified portfolio now and holding them over the long run could be a smart move for patient investors.

Should you invest $1,000 in Welltower right now?

Before you buy stock in Welltower, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Welltower wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $651,345!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,080,327!*

Now, it’s worth noting Stock Advisor’s total average return is 1,058% — a market-crushing outperformance compared to 189% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of September 15, 2025

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.