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Wells Fargo Expects to Cut Q3 Dividend Following Fed’s Stress Test

The Federal Reserve released the results of its 2020 stress test last Thursday, providing the first look at how regulators are assessing the ability of America's largest banks to withstand the coronavirus. The good news is that all 33 of the banks subject to the Fed's test were projected to remain above minimum regulatory capital requirements under each scenario, including V-, U- and W-shaped economic recoveries. In other words, the biggest banks (including Wells Fargo) appear well positioned to survive most financial storms caused by the pandemic without needing to raise more capital. Dividends, which reduce the amount of capital banks retain, were also allowed to continue but with some important caveats.

June 29th, 2020|

Government Aid Supports Omega’s Tenants and Dividend For Now But Longer-term Uncertainty Remains

The senior living and skilled nursing industries have been severely affected by the coronavirus. Not only are their residents more vulnerable if they contract COVID-19, but these facilities are designed for communal living, making it more difficult to control transmission of the virus. As a result of the financial challenges caused by the pandemic, several healthcare REITs have already announced dividend cuts, including Ventas, Welltower, and Sabra. With a dividend yield near 10%, Omega Healthcare has some income investors wondering if it could be next to slash its payout. An imminent dividend cut seems unlikely, but the payout's safety beyond the next couple of months will depend on the depth and duration of the health crisis.

June 25th, 2020|

MPW’s Rent Collection Remains Solid Through June

In April, we discussed how the COVID-19 pandemic caused a drop in demand for non-emergency procedures, increasing financial pressure on MPW's hospital tenants. With many hospitals struggling to earn a profit, it was unclear if MPW's tenants would be able and willing to pay their full rent and keep all of their facilities open. So far, rent collection has not been a problem for MPW. On June 22, the REIT reported that it received 96% of June rent, consistent with April and May.

June 23rd, 2020|

NNN Strikes a More Optimistic Tone About the Dividend as Outlook for Rent Collection Improves

After cautioning in early May that "by no means is the dividend untouchable," National Retail Properties (NNN) appears to feel more confident that its payout will remain secure as lockdown measures continue easing. In April, NNN's 52% rent collection rate was among the weakest of any retail REIT. But at an investor conference on June 8, management said they "feel very good about the trajectory of rent for May and for the rest of the second quarter." When asked if NNN would extend its 30-year dividend growth streak in mid-July (when NNN historically announces its annual increases), management expressed much greater optimism:

June 19th, 2020|
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