Senior Housing Properties Trust
), a real estate investment trust (REIT) which primarily owns
private pay senior living communities and medical office buildings
(MOBs) across the U.S., has recently increased its quarterly
dividend by a penny to 39 cents per share for the third quarter of
2012. The dividend is payable on November 20, 2012 to shareholders
of record on October 22.
HCP INC (HCP): Free Stock Analysis Report
SENIOR HOUSING (SNH): Free Stock Analysis
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The current dividend equates to a 2.6% year-over-year increase in
the dividend payout and is based on the evaluation of the present
market scenario. Based on the closing price of $21.90, the dividend
yield is fairly impressive at approximately 7.1%.
A steady dividend payout facilitates the long-term strategy of
Senior Housing to provide attractive risk-adjusted returns to its
stockholders. The company has also historically promulgated a
dividend reinvestment and direct stock purchase plan through which
stockholders may purchase additional shares of the company by
reinvesting some or all of the cash dividends received on the
Investors looking for high dividend yields are increasingly
favoring REITs. Solid dividend payouts are arguably the biggest
enticement for REIT investors as the U.S. law requires REITs to
distribute 90% of their annual taxable income in the form of
dividends to shareholders.
Senior Housing has one of the most diversified portfolios in the
healthcare sector with exposure to nearly all types of facilities.
The company leases some of its owned healthcare related and senior
housing facilities to third-party operators under "triple net"
leases, under which the tenant pays all taxes, insurance, and
maintenance for the properties, in addition to rent.
Healthcare is relatively immune to the economic problems faced by
office, retail and apartment companies. Consumers tend to continue
to spend on healthcare at the expense of discretionary purchases.
The healthcare industry is also the single largest industry in the
U.S., based on Gross Domestic Product (GDP). Consequently,
healthcare REITs like Senior Housing Properties are poised to
continue their bull run in the long term.
We presently have a Neutral rating on Senior Housing, which
currently has a Zacks #4 Rank that translates into a short-term
Sell recommendation. We also have a long-term Neutral
recommendation and a Zacks #2 Rank (short-term Buy rating) for
), one of the competitors of Senior Housing.