Universal Health Realty Income Trust (UHT) is a real estate investment trust (REIT) formed in 1986. UHT has 54 real estate investments in 15 states, including acute care hospitals, medical office buildings, rehabilitation hospitals, behavioral healthcare facilities, sub-acute facilities and childcare centers.
Dividends have increased steadily from 42.5 cents per quarter in 1997 to the current 62 cents per quarter, beginning 12/31/12. On October 25, 2012, UHT released third quarter 2012 results, which indicated earnings per diluted share of $.24, compared with $.26 per diluted share in the third quarter of 2011. UHT reported adjusted funds from operations (AFFO) of $.71 per diluted share, compared to .66 per diluted share for the first quarter of 2011. At a price of $49.48 (as of December 24, 2012), the dividend yield is 4.9%.
REITs can be an important part of a portfolio of dividend-paying stocks. One advantage REITs enjoy is freedom from corporate income tax if at least 90% of company profits are paid as dividends. I own shares of UHT and I believe it is worth studying as a possible holding in a dividend portfolio. This is not a recommendation to buy, but a recommendation to study. Make your own judgment.
UHT has appreciated significantly in the past two years. Price is an important consideration. UHT is well above my target “buy” price of $42.07, and near the price that I would consider selling some shares ($50.83). My strategy is what some investors call trading around a core position, which means holding a core position in a stock and selling a percentage of the holding as it increases beyond a target “sell” price, and adding to the position when it falls below a target “buy” price.
I began buying UHT in 2008 at $34.55 and I have never sold any shares. I have added to my position during pullbacks.
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