On March 20, we published a note on Main Street (MAIN) explaining why we believed its regular monthly dividend still appeared safe despite the stock's 14% dividend yield at the time and the looming challenges expected from the coronavirus pandemic. This morning Main Street (MAIN) provided a business update and confirmed that its regular dividend is expected to remain safe for now. The firm had already declared its regular monthly cash dividends through June 2020. Based upon management's current projections, Main Street said it expects the board to approve unchanged regular monthly dividends for the third quarter of 2020 (July, August, September) as well.

What is a landlord to do when many tenants, all at once and to no fault of their own, can't operate their businesses and are strapped for cash? This is the question facing Realty Income (O), whose dividend, having never experienced a cut since the firm's founding in 1969, is under its greatest test ever. Realty Income is set to report earnings on May 4, and management will provide insight into the impacts of the coronavirus pandemic on tenants then. For now, based on our analysis below, we are maintaining Realty Income's Very Safe Dividend Safety Score. However, a downgrade could be in order if evidence arrives that many tenants will suffer mightily for longer than a few months.

The coronavirus pandemic is disrupting many industries in the short term, including senior housing and skilled nursing. National Health Investors (NHI), a healthcare REIT, has high exposure to these markets. Senior housing accounts for nearly 70% of NHI's rental revenue, and skilled nursing facilities contribute another 27%.  Source: NHI Q419 Supplemental Information Based on our analysis below, we are downgrading NHI's Dividend Safety Score to Borderline Safe. Prior to the pandemic, the senior housing and skilled nursing markets were struggling due primarily to a boom in new developments over the last five years which created a glut of supply. As you can see, since 2015 industry occupancy rates have slumped across Independent Living (IL), Assisted Living (AL), and Nursing Care (NC). [...]

The coronavirus pandemic is disrupting many industries in the short term, including senior housing. Welltower (WELL) generates over 60% of its net operating income, or NOI, from this industry (primarily senior apartments, independent living, and assisted living). About two-thirds of the REIT's exposure to senior housing comes from properties Welltower runs directly by partnering with an operator (43% of NOI). This exposes the firm to the ups and downs of the industry more than if Welltower solely collected rent from outside operators.