Got $100? Buy This Stock and Relax
Real estate investment trust Ventas (NYSE: VTR) cut its dividend by nearly 45% in 2020. That's not a great sign, given that REITs are purpose-built to pay dividends. However, it appears likely that the cut last year will turn out to be the low-water mark for this diversified healthcare landlord -- so it's a safer investment than many people may realize.
To be fair, Ventas is most definitely not the only real estate investment trust that ended up cutting its dividend in the face of the global coronavirus pandemic. However, when you look at the business here, you'll see that the cut made a lot of sense.
That's because about half of Ventas' rent comes from senior housing assets. The impact of COVID-19 is particularly acute in the elderly, and it spreads quickly in group settings, so early on the news was pretty ugly for this niche of the healthcare property market. To make matters worse, Ventas has a sizable senior housing operating portfolio, or SHOP in industry lingo (technically, it hires others to handle the day-to-day operations). The performance of SHOP assets flows directly through to Ventas' top and bottom lines.
Source Fool.com
