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Welltower to announce dividend increase

What's Happening

Real estate investment trust Welltower ( HCN ) will likely announce a dividend increase this week. The company currently has a seven-year streak of dividend increases, and has a 5.2% yield. HCN shares have fallen a modest 2.3% over the last year.

Technical Analysis

HCN was recently trading at $66.46, down $13.73 from its 12-month high and $13.66 above its 12-month low. Technical indicators for HCN are bearish with the stock showing signs of a possible trend reversal. The stock has recent support above $65.70 and recent resistance below $68.75. Of the 20 analysts who cover the stock, six rate it a "strong buy", 12 rate it a "hold", and two rate it a "strong sell". The stock receives S&P Capital IQ's 3 STARS "Hold" ranking.

Analyst's Thoughts

HCN already has a hefty dividend at 5.2%, but that yield is going to rise slightly higher this week when the company announces its next dividend. Over the company's 45-year existence, it has been a solid dividend grower, with a compound rate of around 5.1%, and it has not been forced to lower its dividend since the 1980s. I see the company once again growing its dividend, but given the current yield, I would not expect to see a huge increase. Look for the quarterly dividend to rise from around $0.86 to around $0.91, which would translate to a 5.8% increase. Look for the news to come this week, with the stock trading ex-dividend in the early part of February.

Stock Only Trade

Bullish Trade

If you want a bullish hedged trade on the stock, consider a March 55/60 bull-put credit spread for a 25-cent credit. That's a potential 5.3% return (34.3% annualized*) and the stock would have to fall 9.3% to cause a problem.

Bearish Trade

There are no bearish trades we like on HCN at this time.

Covered Call Trade

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Originally published on InvestorsObserver.com


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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