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How Healthcare REITs Rewarded Stockholders in 2Q17

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Why dividends matter

REITs are required to pay 90.0% of their profits to shareholders in the form of share buybacks or dividends. That allows them some additional tax benefits that other companies don’t have.

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Welltower’s dividend policy in 2Q17

In 2Q17, Welltower (HCN) announced a quarterly cash dividend of $0.87, payable on August 21, 2017. The dividend is more than the $0.86 it paid the previous year. This dividend hike marks its 185th consecutive quarterly dividend payment. Prior to this dividend increase, Welltower hiked its dividend in January 2016 by 4.2% to $0.86 per share. It offered a dividend yield of 4.9% and 5.1% in 2015 and 2016, respectively. It expects to maintain a dividend yield of 4.9% in 2017.

Healthcare Trust of America’s shareholder return in 2Q17

Healthcare Trust of America (HTA) announced a hike of 1.7% in its quarterly dividend for 2Q17 to 30.5 cents per share The new dividend represents an annualized rate of $1.22 per share. During 2Q17, the company paid a dividend of $0.30 per share. It offered a dividend yield of 4.3% and 4.1% in 2015 and 2016, respectively. It’s expected to offer a dividend yield of 4.0% in fiscal 2017.

Ventas paid higher dividends in 2Q17

Ventas (VTR) paid a dividend of $0.78 per share in 2Q17. That was 6.0% higher than the previous year. It offered a dividend yield of 5.5% and 4.7% in 2015 and 2016, respectively. It’s expected to offer a dividend yield of 4.7% in fiscal 2017.

The three REITs, along with Public Storage (PSA), account for 26.0% of the iShares Residential Real Estate Capped (REZ). The ETF offers a yield of 4.6%.

In the next part, we’ll compare the valuations of our three REITs.

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