Healthpeak Properties (NYSE: PEAK) is a healthcare real estate investment trust (REIT) with over $20 billion worth of real estate. Properties include an outpatient facility in Poway, California; Lone Peak Hospital in Salt Lake City; and a medical park in Pensacola, Florida. The company has been publicly traded for 38 years. Healthpeak Properties yields 5.9%. But can investors rely on the $0.30 per share quarterly dividend? Let's find out... Since Healthpeak Properties is a REIT, we use funds from operations (FFO) to determine whether the company can fund its dividend. After a drop from $700 million to $611 million in 2021, FFO jumped last year and is forecast to grow again in 2023. Last year, Healthpeak Properties generated $905 million in FFO while paying out $648 million in dividends for a payout ratio of 72%. I'm comfortable with REITs paying out as much as 100% of their FFO since, by law, they must pay shareholders 90% or more of their earnings. Keep in mind, earnings are different from FFO, but because REITs pay out such a high percentage of their earnings, they also tend to pay out most of their FFO in dividends. |
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