Combine a dividend yield of more than 6% and a steady stock
performance, and you have the makings of an appealing income
That's the basic profile ofSenior Housing Properties Trust (
), a real estate investment trust, or REIT, that owns senior
living communities, medical office buildings and other facilities
in 40 states and Washington, D.C.
In total, the Newton, Mass.-based company has about 400
buildings in its portfolio.
Because it is structured as a REIT, the company pays out most
of its profit -- or fund from operations, as it's called for
REITs -- through dividends.
It currently pays a quarterly dividend of 39 cents a share,
which works out to an annualized yield of 6.5%.
The annual dividend has risen steadily from $1.24 a share 10
The stock's long-term chart shows that it's been basically
sideways since 2009.
Its current yearlong correction of 31% is the deepest in that
span. At the same time, it has offered little by way of
Senior Housing Properties believes that the aging baby-boomer
generation is working in its favor. Demand for senior housing is
exceeding supply, the company says. An aging population also is
raising demand for health care.
Among rivals, Senior Housing Properties says that it has the
highest percentage of revenue from private tenants while having
the lowest exposure to Medicare and Medicaid tenant revenue.
Its funds from operations have been lower or flat for many
quarters. Pretax margin for 2013 was 24.2% -- healthy but still
below the 45% peak in 2007 and 2008.
IBD's property REIT industry group, which has about 170
companies, has been rising quickly in rankings as investors flee
from more speculative investments. The group ranked No. 36 out of
197 in Friday's edition, rallying from No. 128 just three weeks