One Raise at a Time | For The Love Of Health...And Real Estate
On Monday of last week the Board of Directors at Ventas, Inc. (VTR) approved an increase to their quarterly dividend payment. The dividend was increased from $0.775 per share per quarter to $0.79. That works out to a 1.9% increase. Ventas is a Dividend Challenger and is working on their 8th consecutive year of dividend increases. Shares currently yield 5.28% based on the new annualized payout.
Since I own 23.374 shares of Ventas in my FI Portfolio this raise increased my forward 12-month dividends by $1.40. This is the 3rd dividend increase I've received from Ventas since initiating a position back in 2015. However, due to the spinoff of Care Capital Properties (that has since been acquired by Sabra Health Care (SBRA), the cumulative dividend growth is a whopping 0%. After adjusting for the spinoff the dividend growth is more palatable at 8.2% cumulatively since the end of 2015. According to US Inflation Calculator the cumulative rate of inflation over that same time is just 4.1%. That's dividend growth investing in a nutshell.
A full screen version of this chart can be found here.
I like to examine the dividend growth rates that a company has doled out over time in order to see whether dividend growth is holding steady, increasing or decreasing. Looking at this gives you an idea of the possible future direction of dividend growth.
Ventas' dividend growth clearly seems to have slowed over the last few years which is disappointing, although not really unsurprising given the environment they're dealing with. Rising interest rates, cutting health care costs, spinning off portions of their business. Overall though things seem just fine and if a company is paying me over 5% then I don't require big dividend growth in order to be happy.
|Ventas Inc. (VTR) Annual Dividend and Rolling Dividend Growth Rates|
My forward dividends increased by $1.40 with me doing nothing. That's right, absolutely nothing to contribute to their operations. Based on my portfolio's current yield of 2.70% this raise is like I invested an extra $52 in capital. Except that I didn't! One of the companies I own just decided to send more cash my way.
That's how you can eventually reach the crossover point where your dividends received exceed your expenses. That's DIVIDEND GROWTH INVESTING AT WORK! The beauty of the dividend growth investing strategy is that you build up your dividends through fresh capital investment as well dividend increases from the companies you own.
Thus far in 2017 I've received 46 dividend increases from 39 companies held in my FI Portfolio increasing my forward 12-month dividends by a combined $267.00.
My FI Portfolio's forward-12 month dividends increased to $5,810.06. Including my FolioFirst portfolio's forward dividends of $75.82 brings my total taxable accounts dividends to $5,885.88. My Roth IRA's forward 12-month dividends are at $318.35.
Do you own shares of Ventas? Any concerns with the slow dividend growth or just steady as she goes while they work things out?
Please share your thoughts below.