U.S. REITs – National Health Investors Shines, But With A Caveat


National Health Investors (NYSE: NHI) has proven that it is a star in terms of growing dividends, enjoying one of the highest dividend increases amongst healthcare REITs. Although they do not have a perfect record, the company’s second quarter results report robust metrics, thereby keeping their momentum in high gear. In addition, National Health Investors’ dividend yield is nearly six percent, and their price-to-FFO is at more reasonable levels than some other REITs.

National Health has benefited from a long history of doing business, and currently has a market capitalization of 2.2 billion dollars. Incorporated in 1991, records show that they did indeed have some tough times in the early 2000s, all well as the last recession. Funds from operations dropped and the company skipped paying dividends to their investors in some quarters.

Today, National Health Investors owns 187 properties in thirty-one states, with a significant amount being assisted living facilities that house seniors. The company also owns and leases skilled nursing facilities, hospitals, and medical office buildings. Currently, the company’s focus has been on investing in senior housing. Based on that fact, we do not see a drastic change in their current strategy.

Here are a few highlights of their performance in Q2 2015 year over year figures:

Revenues are up by twenty-eight percent.

FFO per share is up by ten percent.

Dividend rates are up by ten percent.

The Dividend payout ratio is at seventy-four percent.

Justin Hutchens, National Health’s former CEO, caught the market off guard by resigning this past August. He left to join HCP, a larger healthcare REIT, as the Executive Vice President, and Chief Investment Officer of senior housing and care. National Health’s new CEO has been a part of the company since earlier this year. This curveball does not make National Health a decisive buy. Only time will tell how the new CEO will perform because National Health’s latest figures are a result of the previous leadership.

Source: National Health Investors, Fast Graphs

Disclaimer: This newsletter is not engaged in rendering tax, accounting, or other professional advice through this publication. No statement in this issue is to be construed as a recommendation to buy or sell any security or other investment. Please do your own due diligence before making any investment decision. Some information presented in this publication has been obtained from third-party sources considered to be reliable. Sources are not required to make representations as to the accuracy of the information, however, and consequently the publisher cannot guarantee accuracy.

Disclosure: The author has no positions in any shares mentioned, and no plans to initiate any positions within the next 72 hours.

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