It might be easier to find retirees' nightmare stocks than dream stocks. There are lots of stocks with no dividends, or paltry dividends. There are lots of stocks with highly risky business models. 

But just because there are many nightmare stocks doesn't mean you can't find dream stocks, too. One stock I think certainly qualifies is Welltower Inc. (NYSE:WELL). The healthcare real-estate investment trust (REIT) has a lot to offer retired investors.

Senior woman and man on a beach at sunset with their arms raised high

Image source: Getty Images.

A solid business model

When first evaluating a stock, retired investors (or any investor, for that matter) should start by looking at the underlying business of the company. Welltower's business is owning and leasing properties to healthcare providers, including senior housing operators, post-acute care communities, and outpatient medical facilities. 

Welltower ranks as the largest publicly traded healthcare REIT in the U.S. and is the fifth-largest REIT overall by enterprise value, including all sectors. As of March 31, 2018, the company owned 1,277 properties across the U.S., Canada, and the United Kingdom.

There's a huge trend working in Welltower's favor: an aging population. In the U.S., the population of individuals aged 85 and over is projected to double in the next two decades. The population of Americans age 65 and older is expected to grow by 36% through 2025. This aging population will drive demand for senior housing, including memory care, assisted living, and independent living, as well as post-acute care communities such as skilled nursing facilities. 

Welltower has shifted its strategy in recent years to focus primarily on properties in major high-growth urban markets in the countries where it operates. These markets tend to have high barriers to entry for building senior housing, post-acute care communities, and outpatient medical facilities. The company's research indicates that more than 80% of residents in these markets are open to living in an urban senior living community.  

What's especially great about Welltower's properties is that the company has a much higher mix of private-pay and Medicare residents than its main rivals do. This makes the properties more profitable. In addition, the average age of Welltower's properties is half the average of other healthcare REITs.

A great dividend

Many retired investors would probably list a great dividend with a high yield at the top when listing the criteria for a dream stock. Welltower doesn't disappoint on this front.

The company's dividend currently yields 5.4%. Over the last 10 years, the company has increased its dividend payout by 28%.

Can Welltower keep those dividends flowing? I think so. As a REIT, Welltower must return at least 90% of taxable earnings to shareholders in the form of dividends. As discussed earlier, long-term demographic trends are quite favorable for the company's growth potential.  

High debt loads can sometimes affect a REIT's ability to earn profits and pay out dividends. That shouldn't be a big problem for Welltower, though; the company's debt maturity profile appears to be manageable. Three of the major debt rating agencies all rate Welltower's debt as stable and subject to moderate rather than high credit risk.

Not just for retirees

In my opinion, these qualities make Welltower a retiree's dream stock. However, the stock isn't a good fit just for retirees. Any investor should like stocks with solid business models and great dividends. 

One note of caution to keep in mind is that rising interest rates can negatively affect REITs like Welltower. Also, the demographic trends that should favor the company will roll out over several years.

If you're looking to buy a stock that skyrockets immediately, Welltower might not be for you. But for investors with long-term perspectives -- and that should include retirees -- I think Welltower is definitely a stock to consider.