National Health Investors Cuts Dividend by 18.4%

National Health Investors, Inc. (NHI) slashed its quarterly dividend by 18.4% to $0.90 per share.

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The dividend is payable on August 6 to shareholders of record on June 30. During the first quarter, the company paid a dividend of $1.1025 per share.

The dividend cut will lead to a savings of $28 million in 2021. The company will put the savings towards improving the quality of its real estate portfolio through lease restructurings, asset sales, and accretive acquisitions.

NHI CEO Eric Mendelsohn commented, “We have said that we are motivated to use the pandemic to transform NHI into a stronger company. Today’s action is another indication that the transformation is underway. We expect that right-sizing our dividend provides sufficient capacity to assist our operators through the business recovery while maintaining our balance sheet strength and ultimately return to growth.”

Furthermore, NHI revealed that Holiday Retirement has agreed to defer rent of $600,000 per month for May, June, and July of 2021. The company will release the same amount from the Holiday security deposit to be applied to rent for these three months. The remaining monthly base rent of $1.7 million will be paid in cash. (See NHI stock analysis on TipRanks)

Post the dividend cut announcement, BMO Capital analyst John Kim reiterated a Sell rating and a price target of $64 (2.1% downside potential) on the stock.

Overall, the stock has a Hold consensus rating based on 3 Holds and 1 Sell. The average analyst price target of $72.25 implies 10.6% upside potential from current levels.