SNH - Is Senior Housing Properties Trust Stock a Buy?
At the start of 2019 Senior Housing Properties Trust (NASDAQ: SNH) was paying a dividend of $0.39 per share per quarter. But just one quarter later it dropped its quarterly disbursement to $0.15 per share, a massive 60% dividend cut. That was a tough call, since management is well aware that dividend investors don't appreciate dividend cuts.
Even with the cut, though, the yield here is still elevated at around 8% (roughly four times the yield of an S&P 500 Index fund). If Senior Housing has regrouped and positioned itself for better days, as management contends, investors might be missing an opportunity here. But what's really going on?
Senior Housing Properties Trust is a healthcare real estate investment trust (REIT). It owns a diversified portfolio of assets, including senior housing (around 50% of rent), medical research facilities (27%), and medical office buildings (23%). This isn't materially different from many of the industry's largest players, including Ventas and Healthpeak Properties. So from a portfolio-diversification perspective, Senior Housing Properties is right in-line with peers. In fact, one of the biggest positives here is that medical office and research properties make up roughly half the portfolio. These assets are in high demand right now, and management expects that to remain the case for years to come.