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MIDAS SHARE TIPS UPDATE: Primary Health Properties – what doctor ordered

MIDAS SHARE TIPS UPDATE: Primary Health Properties still on track despite inflation and market volatility

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Even if many of us are used to online doctor appointments these days, there are still times when we need community medical help.

That’s true Primary health properties enters and supplies the buildings that house GP surgeries, clinics and other non-hospital healthcare businesses in the UK and Ireland.

The strategy of the Real Estate Investment Trust (REIT) is to lease the buildings to third parties, and on ten percent of its revenues it is backed by the government, making it a relatively safe choice for investors.

Strong pick: Midas tipped Primary Health Properties in February as one of five to survive Russia-Ukraine turmoil

Strong pick: Midas tipped Primary Health Properties in February as one of five to survive Russia-Ukraine turmoil

Last week’s half-year results showed that the company is still on track despite inflation and market volatility.

Management believes that inflation can even be a tool, not a hindrance, as it is able to raise rents but has fixed the cost of most of its debt over the long term.

Midas tipped the stock in February as one of five stocks to survive the turmoil between Russia and Ukraine.

That has proved correct, as while the shares have fallen three per cent since January, they have risen from £1.34 when Midas tipped them to £1.48.

MIDAS VERDICT: No investment is risk-free, and PHP faces inflation, government vagaries when it comes to healthcare financing, and market sentiment when it comes to capital appreciation for its shareholders. PHP is also expensive, with stock valuations well above book value.

But dividend hunters will benefit from PHP’s 4.6 percent return. However, because of its REIT structure, it has to pay out most of its profits as dividends, meaning that when it wants to acquire other companies, it has to issue new shares, diluting existing shareholders.

Despite all this, PHP is a strong choice, and with a backlog of post-pandemic procedures and an aging population, healthcare investment is not going to disappear. This investment is worth holding on to.

Traded on: Main market ticker: PHP Contact: phpgroup.co.uk or 020 3824 1841

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