We write about it every week it seems. Investors are hunting for yield as interest rates on sovereign debt around the globe continue to tumble. The conundrum is that many of the bond proxy sectors like telecom and the utilities have gotten way too pricey and could be nearing or at a top. That would be fine if the sectors had big growth rates, but they don’t. One sector that continues to grow is health care, and the health care real estate investment trusts (REITs) that have traded higher still offer outstanding distributions.

A new Deutsche Bank research report hardly pounds the table on the sector and does remain cautious. In fact, it acknowledges that the impact of changes to health care reimbursement models add risk to tenant coverage ratios. But when you combine an aging population and a consolidating sector, there is still value for long-term investors. These three stocks are covered in the Deutsche Bank report.

Medical Properties Trust

Medical Properties Trust Inc. (NYSE: MPW) is rated Buy at Deutsche Bank and may be offering investors the best value at current price levels. It acquires, develops and invests in health care facilities, and it leases health care facilities to health care operating companies and health care providers. The company also provides mortgage loans to health care operators, as well as working capital and other term loans to its tenants/borrowers.

With a growing portfolio and a versatile business model, the company continues to rank high across Wall Street. Analysts note that the company’s acute care hospitals rent coverage increase nicely and the company attributed the increase to better cost controls and higher patient admissions.

The Deutsche Bank report noted:

With leverage currently inside the target range, the company kicked off an agreement to acquire 23 German hospitals through Median . Management also discussed potential for additional opportunities stemming from this agreement, which are currently not under a binding contract and could be announced in the next few quarters. The company expects the investment to total around $300 million, including the potential deals not yet announced or under contract. The company also indicated a healthy pipeline of mostly U.S. acute care hospitals beyond the Median deals.

Shareholders receive an outstanding 6.01% distribution. The Deutsche Bank price target for the stock is $17. The Wall Street consensus target is $15.64. The shares closed Thursday at $15.30.

Ventas

A top company in the sector, Ventas Inc. (NYSE: VTR) may be one of the safest plays for more conservative accounts. Its diverse portfolio of approximately 1,300 assets in the United States, Canada and the United Kingdom includes seniors housing communities, medical office buildings, skilled nursing facilities, specialty hospitals and general acute care hospitals. Through its Lillibridge subsidiary, Ventas provides management, leasing, marketing, facility development and advisory services to highly rated hospitals and health systems throughout the United States.

Ventas reported second-quarter 2016 normalized funds from operations that were in line with estimates, but its revenues beat the consensus forecast. They were also up handily from the year-ago print. For same quarter, same-store cash net operating income (NOI) growth for total portfolio (1,186 assets) was 3.5% on a reported basis, but that included the gain from a deal with Kindred. Notably, triple net same-store cash NOI grew 6.2%, the seniors housing operating portfolio same-store NOI grew 2.1% and the medical office building portfolio rose 0.8%.

Ventas shareholders receive a 3.95% distribution. Deutsche Bank rates the stock at Hold with a price target of $72. The consensus target is $71.69, but the shares closed on Thursday at $73.95.

Welltower

Formerly known as Health Care REIT, Welltower Inc. (NYSE: HCN) engages in the acquiring, planning, developing, managing, repositioning and monetizing of real estate assets. It primarily invests in the real estate markets of the United States and primarily in senior living and health care properties. That includes the full spectrum of health care real estate, including senior living communities, medical office buildings, inpatient and outpatient medical centers and life science facilities. The firm conducts in-house research to make its investments.

The company recently acquired an expansive set of assets. It has agreed to purchase a portfolio of properties from Vintage Senior Living for $1.15 billion. The 19 facilities involved, most of which are located in California, contain a total of 2,590 units. Welltower will tap three of its partners, Senior Resource Group, Sunrise Senior Living and Silverado, to manage the properties.

Shareholders receive a 4.45% distribution. Deutsche Bank has a $73 price objective for the stock, which they rate at Hold. The consensus target is $74.44. The stock closed most recently at $77.75.

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Investors need to remember that REIT distributions can contain return of principal. While there may not be big upside to these companies, there is also probably limited downside. Investors may want to nibble at these levels and see if the stocks don’t back up some over the next two months.

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