Government Pay Won't Save Omega from COVID-19 Fallout
Stocks for healthcare real estate investment trusts (REITs) that serve seniors have been hit hard by investors concerned about fallout from the COVID-19 pandemic. That makes some sense, given that the coronavirus has had a greater and deadlier impact on the older population. Concern that these healthcare-related REITs will be weakened isn't unreasonable. However, it's important to dig a bit deeper ... and then deeper still to see if this assumption is actually correct.
Here's why REIT Omega Healthcare Investors (NYSE: OHI) is still in a tough spot, even though the funding providers for its biggest customers are rock solid.
COVID-19 is a new disease for which humans have yet to build up defenses (like a vaccine, for example). That's one of the reasons why it has had such a marked effect on the world. It is also highly contagious, compounding the problem. Then add in the fact that mortality rates for the disease skew much higher in older adults. This means that the very people who would be most likely to occupy senior housing facilities are the most at risk of contracting the disease and dying from it. It's no wonder investors are avoiding real estate investment trusts like Omega which own such assets.
Source Fool.com
