1 Magnificent Canadian Dividend Down 62% to Buy and Hold for Decades

A dividend stock that’s trading down can still be a buy-and-hold gem for decades, especially if it’s down from all-time highs, but up in the last few months. A temporary slump often has little to do with the dividend stock’s long-term strength. Maybe it’s facing a short-term headwind, the entire sector is out of favour, or investors are simply chasing trendier names, but the underlying business can still be pumping out steady cash flow, raising its payout, and growing its customer base. Over decades, those dividends and recoveries, not the momentary dip, are what build real wealth.

Consider NWH

NorthWest Healthcare Properties REIT (TSX:NWH.UN) is one of those Canadian income names that seems built for long-term investors, even if it doesn’t always get the spotlight. It owns a global portfolio of hospitals, medical office buildings, and specialty care facilities, assets that tend to hold up in every economic cycle because healthcare demand doesn’t shrink when markets turn volatile.

With properties spread across Canada, Europe, Brazil, Australia, and New Zealand, the trust benefits from geographic diversification and long leases that often run 10 to 20 years. Even with its struggles, the core business remains tied to essential services that tenants prioritize paying for, which provides a foundation most REITs would envy.

The trust has spent the last few years restructuring, selling non-core assets, and repairing its balance sheet. These moves pushed the stock lower, but also gradually reshaped NorthWest into a leaner, more sustainable real estate platform. Medical tenants tend to be sticky, with high renewal rates and inflation-indexed leases. Thus, cash flow grows even during downturns. While sentiment around the stock hasn’t fully recovered, the underlying business continues to move in the right direction, setting it up for eventually healthier growth.

Into earnings

In its most recent earnings results, NorthWest reported progress on its ongoing asset sales and debt reduction efforts, which have been central to its turnaround plan. Management highlighted improved liquidity, reduced leverage, and early signs of stabilization across several regions.

While revenue and funds from operations remain pressured as the portfolio is reshaped, investors saw a clearer path toward balance-sheet normalization – something that has weighed heavily on valuation. Importantly, occupancy remained high across its medical properties, reinforcing the essential nature of its tenant base.

The dividend stock also updated progress on refinancing activities, locking in better lending terms as the balance sheet improved. These developments helped narrow the gap between operating performance and unit price, suggesting the market may be underestimating how quickly the business is recovering. With many of the large one-time hits now behind it, the trust is entering a stage where operating results can better reflect long-term fundamentals rather than short-term restructuring noise.

Foolish takeaway

NorthWest Healthcare Properties is trading at a steep discount because of past missteps. Yet that discounted price is exactly why long-term income investors may want to take a closer look. The dividend stock owns mission-critical assets that tend to outperform in recessions, benefit from demographic tailwinds, and enjoy long lease terms that support stable, predictable cash flow. As debt levels continue to fall and earnings normalize, today’s lower price could look like an opportunity rather than a warning sign. And during that time, you could be collecting immense returns even from a $7,000 investment.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTNWH.UN$5.361306$0.36$470.16Monthly$6,999. 16

For patient investors, the combination of a beaten-down valuation, improving fundamentals, and healthcare-anchored real estate creates a rare setup. It’s a stock that’s trading down yet still has the structural qualities to be held for decades. The path won’t be perfectly smooth, but the long-term story of essential services, global diversification, and strengthening financials remains firmly intact.

The post 1 Magnificent Canadian Dividend Down 62% to Buy and Hold for Decades appeared first on The Motley Fool Canada.

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More reading

• This 6.6% Dividend Stock Pays Me Every Month Like Clockwork
• How to Structure a $50,000 TFSA for Consistent Monthly Income
• Easiest Monthly Paycheque: 2 Canadian Stocks to Buy Now
• Why This Canadian REIT Could Be a Buy-and-Hold Forever Stock
• This 6.8% Dividend Stock Pays Cash Every Single Month

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends NorthWest Healthcare Properties Real Estate Investment Trust. The Motley Fool has a disclosure policy.