Why Ventas Stock Is Falling
Stock price performance
The recent increase in interest rates has impacted the performance of VTR. However, the effect of these rate hikes will likely be offset by the company’s stronger performance. Also, the healthcare sector may be affected due to the expected revamp of Obama’s healthcare bill, which could reduce fiscal spending on healthcare.
VTR lost 9.2% in the last one year, 16.9% in the last six months, and 10.8% in the last three months. HTA has lost 9.6% in the last one year, 18.3% in the last six months, and 10.4% in the last three months. The iShares Core U.S. REIT ETF (USRT) lost 2.6% in the last one year. VTR forms 2.4% of USRT.
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VTR’s dividend policy
Ventas (VTR) announced a dividend of $0.78 per share for 4Q17, making a total of $3.11 for 2017, which is up from $2.96 in 2016. It paid a dividend of $3.04 in 2015. The three-year dividend growth rate was 1.7%, while the five-year growth rate was 4.7%.
Ventas is focused on increasing shareholder value. With consistent and growing cash flow, the dividends could increase. VTR has increased its dividend every year for more than one decade. It has achieved an 8% compound annual dividend increase since 2001.
Dividend yield and payout ratio
VTR has a dividend yield of 5.7% and a payout ratio of 187.5%. Competitors Welltower (HCN), Healthcare Trust of America (HTA), and HCP (HCP) have yields of 5.8%, 4.4%, and 6.2%, respectively, and a payout ratio of 191.3%, 360.6%, and 156.3%.