This 1 Dividend Stock Outperformed the Nasdaq Last Year and Can Do It Again

When most people are chasing dividends and safety, they often go for defensive stocks like consumer staples. However, under-the-radar dividend stocks like American Healthcare REIT (NYSE:AHR) are worth deeply looking into. Not only does the healthcare sector give you extremely stable gains, but it is also growing fast. Now pair up the fact that REITs are also doing well due to interest rates coming down, and you have a solid contender for a stock that can beat the Nasdaq again.

Healthcare-adjacent businesses are obviously not immune to a recession, but they are highly underappreciated. You won’t hear “we’re going through a tough time due to consumer sentiment… bla bla bla” in their earnings calls. The demand is inelastic, predictable, and most importantly, not getting healthcare is not an option people make.

Of course, not every healthcare stock is surging at the moment. Let’s take a look at what makes AHR stock special.

AHR stock is soaring and is likely to keep doing so

You expect real estate investment trusts to have high dividend yields, with low capital gains. American Healthcare REIT is a complete inversion of that, and in quite an aggressive way.

You get a 1.92% dividend yield, which is quite low for REIT standards. This is because AHR stock has gone up so fast that the dividend yield simply can’t keep up and be “attractive”. AHR stock is up 79.6% in just the past year and is already up 10.3% year-to-date. Even your favorite growth stock can’t keep up with this pace.

This REIT buys and owns senior housing communities, skilled nursing facilities, and outpatient medical office buildings in the U.S. and the U.K. The holdings are a blend of properties that offer things that are desperately in need today, and the desperation will only grow over time.

Almost 90% of nursing homes have staffing shortages already, with hospitals already not being able to find and retain nurses in sufficient quantities. This is not a runaway problem for COVID, but something that was building up to be an issue well before 2020. There just aren’t enough young people to take care of the aging population. And those who are young find the healthcare sector to be unsexy.

An exemplary gamble

AHR spent around a decade as a non-traded REIT quietly accumulating healthcare properties, and finally went public on the NYSE in February 2024 at just $12 per share, the very bottom of its marketed IPO range. The market greeted it with a shrug. At that price, AHR had a market cap of roughly $1.5 billion despite owning $4.6 billion in total assets.

Management then looked at the aging baby boomer population and noticed something most investors were slow to appreciate. That is, senior housing supply had been essentially frozen for years. The wave of Americans turning 80 was just beginning to crest. Instead of simply collecting rent from operators, AHR chose the RIDEA structure for a large portion of its portfolio. Hence, it participates directly in the operating profits of its senior housing communities rather than getting a fixed lease check. That is a higher-risk, higher-reward model, and it has paid off handsomely as occupancy has surged.

That occupancy significantly coming down is unthinkable. People keep getting older, and in increasing numbers, for as far as the eye can see. The U.S. is not expected ever to see a meaningful population decline due to immigration.

The REIT is now actively paying down debt, and it is doing so very fast.

This is alongside the dividends that are being paid today. A small cash reserve is also being built up.

Why I expect a strong 2026 for AHR stock

REITs have delivered solid gains in the past few months, and this environment is perfect for them. Plus, the healthcare sector is finally taking off again in a big way, so AHR stock is well-positioned to reap the gains.

Once debt is fully paid off, the company will be resting on heaps of excess cash, which it will return to shareholders in the form of dividends. REITs are required to distribute over 90% of their profits to shareholders, so you’re looking at a strong yield complemented by strong capital gains.