Our analysis is based on comparing Senior Housing Properties Trust with the following peers – Ventas, Inc., Healthcare Realty Trust Incorporated, Sabra Health Care REIT, Inc., Alexandria Real Estate Equities, Inc., Universal Health Realty Income Trust, Welltower, Inc., HCP, Inc. and Gyrodyne LLC (VTR-US, HR-US, SBRA-US, ARE-US, UHT-US, HCN-US, HCP-US and GYRO-US).
Senior Housing Properties Trust’s dividend yield is 8.88 percent and its dividend payout is 269.85 percent. This compares to a peer median dividend yield of 4.67 percent and a payout level of 187.47 percent. This type of dividend performance might make it a good stock for dividend investors. However, the company’s relatively low dividend quality score of 17 out of a possible score of 100 raises questions on the sustainability of its robust payout ratio.
Dividend Quality Overview
- Over the last twelve months (prior to December 31, 2016), SNH-US paid a low quality dividend, which represents a yield of 7.11% at the current price.
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 2 were medium quality and 3 were low quality.
- The ending cash balance is less than the last full year dividend payment and cannot be relied on to cushion any significant reduction of cash flows in the future.
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Over the last twelve months (prior to December 31, 2016), SNH-US paid a low quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 1.15x), investing cash flow (coverage of -0.79x), issuance cash flow (coverage of 0.62x) and twelve-month prior cash (coverage of 0.12x), for a total dividend coverage of 1.10x.
SNH-US‘s issuance cash flow includes outflows from net share buybacks (coverage of -0.00x). Thus, the total coverage including share buybacks is 1.10x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.
These coverage ratio factors imply that the firm had to dip into the beginning cash balance to pay the dividend, which suggests a low dividend quality.
|Dividend Yield (%)||6.22||6.91||6.78||10.11||8.24||8.88|
|Dividend Payout (%)||191.25||192.59||202.54||293.18||269.85||269.85|
A complete list of metrics and analysis is available on the company page.
Senior Housing Properties Trust is a real estate investment trust, which invests in independent living communities It operates its business through the following segments: Triple net senior living communities, Managed senior living communities, MOBs and All Others. The Triple net senior living communities segment provide short term and long term residential care and other services for residents. The Managed senior living communities segment provide short term and long term residential care and other services for residents. The MOBs are office or commercial buildings constructed for use or operated as medical office space for physicians and other healthcare personnel, and other businesses in medical related fields, including clinics and laboratory uses. The Other segment includes the remainder of its operations, including certain properties that offer fitness, wellness and spa services to members. The company was founded on December 16, 1998 and is headquartered in Newton, MA.
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