If you're looking for stocks that pay big dividends -- I'm talking about 3%, 4%, or 5% yields -- few sectors of the market can match real estate investment trusts, or REITs. But these companies aren't just about dividends. By acquiring properties and building their portfolios, REITs can offer serious growth. Here are three companies off to a hot start acquiring properties in 2015.
1. Health Care REIT (NYSE:WELL)
On Jan. 22, the Boston Globe reported that Health Care REIT purchased nine assisted-living facilities from Intercontinental Real Estate Corp. of Boston. The $360 million transaction included 961 residences located in Massachusetts, New Hampshire, and Connecticut.
Health Care REIT invests primarily in senior housing and assisted living, but that's not the only reason this move makes sense. While Health Care REIT's properties are spread out across the U.S., the company has a strong presence in the Northeast -- which means this is an area the company understands.
Also, while Health Care REIT will own the properties, Benchmark will operate the facilities. Benchmark already runs 4% (by investment size) of Health Care REIT's properties, so this is a partner it's already comfortable with.
While the acquisition is not a game changer for the $27.2 billion market cap company, it is a deal that makes sense, and continues to add to Health Care REITs high-quality and diverse portfolio.
2. LaSalle Hotel Properties (NYSE:LHO)
On Jan. 26, LaSalle announced its purchase of Westin Market Street Hotel in San Francisco for $350 million. The property has since been renamed the Park Central San Francisco.
According to LaSalle, the luxury 681-room hotel is well located in "a highly diversified submarket ... [near] AT&T Park and office headquarters for companies such as Twitter, Instagram, and Pinterest." With this acquisition, LaSalle now owns 46 hotels, including seven in San Francisco. The city accounts for 17% of the company's EBITDA -- earnings before interest, taxes, depreciation, and amoritzation.
Unlike Health Care REIT, LaSalle's market cap is just over $4.4 billion. As a smaller company, this acquisition should make a more meaningful difference in growth and earnings.
3. Ventas (NYSE:VTR)
By far the biggest acquirer of the three in Jaunary, Ventas announced the completion of its acquisition of American Realty Capital Healthcare Trust, or HCT, on Jan. 16. It was a cash and stock deal that valued HCT at $2.6 billion.
The merger included 143 health care properties. Medical office buildings accounted for half the total properties, and the rest were split among senior housing, assisted living, and hospitals. With the additional properties, Ventas owns more than 1,600 properties diversified throughout the U.S. and Canada.
Equally important, the merger added 10 new senior-living operators to further diversify the company's tenant base. And lastly, 71% of the medical office buildings are investment grade -- leased to high-quality tenants -- and are 97% occupied.
Despite the company's already massive $23.7 billion market cap, Ventas' merger with HCT should positively impact earnings. But, more importantly, the name of the game for income investors is consistency. Companies that own a large and diverse portfolio of properties are better protected from all matter of unseen risks. For Ventas, the merger adds over 140 properties within the company's core competency, making it a more diverse, and therefore more stable, business.