On March 16, we discussed how the coronavirus pandemic could hurt the performance of Ventas' (VTR) senior housing business. Since then, the number of challenges facing Ventas across almost all parts of its portfolio has continued to rise. As a result, the firm's cash flow now seems likely to fall short of its dividend for the foreseeable future. While Ventas could borrow to continue paying its dividend, it may choose not to in this highly uncertain environment. Given this backdrop and the conservative view we take when assessing dividend risk, we are downgrading Ventas' Dividend Safety Score from Borderline Safe to Unsafe.

Healthcare Trust of America (HTA) is the largest publicly-traded REIT focused on medical office buildings in the U.S. with more than 450 properties. Healthcare systems, academic medical centers, and physician groups rent HTA's properties to provide healthcare services. No tenant accounts for more than 5% of total rent, and no state contains more than 20% of HTA's buildings. Approximately 66% of HTA's portfolio is located on the campuses of, or adjacent to, nationally and regionally recognized healthcare systems. This helps create more demand from medical practices for the firm's properties. Usually, this is a predictable business given the stable nature of healthcare services. But the coronavirus pandemic has put some of HTA's tenants under immense financial pressure.

EPR Properties (EPR) provided a brief company update this evening. Management said that since EPR's last update on March 24, "the impact of the pandemic has increased significantly with the temporary closing of substantially all of its customers' operations." Tenants and borrowers have paid just 15% of April 2020 base rent and mortgage payments. EPR agreed to defer these payments on a month-to-month basis for substantially all of the customers that have not paid rent this month. The big question is how many of EPR's tenants will survive this crisis. Movie theaters drive 45% of EPR's revenue, and Eat & Play businesses such as TopGolf and Pinstripes account for another 23% of sales. Education facilities represent 11% of revenue as well.

Halliburton (HAL) has paid uninterrupted dividends for decades, but the firm's streak looks increasingly likely to come to an end in the near future. The oilfield services provider this morning reported earnings. Unlike in the past, management emphasized that Halliburton would not lean on its balance sheet to protect the dividend during this down cycle: Finally, our dividend is a lever we can pull, based on our market outlook and valuations. Our board and management review the dividend quarterly, and will act prudently to make adjustments for the long-term success of our business. Let me be clear. We have no intentions to increase leverage to maintain the dividend. We also do not intend to allow the dividend to prevent us from being structurally [...]