Here's How Universal Health Realty Can Afford Its 6.1% Dividend Yield

Shares of Universal Health Realty Income Trust (NYSE: UHT) have fallen over 60% from their 2020 highs. That has pushed the dividend yield of this healthcare-focused real estate investment trust (REIT) up to an attractive 6.1%.

But investors should tread carefully here. While the dividend looks sustainable, there's some small problems that should keep most investors on the sidelines.

Universal Health Realty owns medical office buildings (68% of its portfolio as of 2022), acute-care properties (17%), and behavioral health assets (8%), with other property types, none of which accounts for more than 3% of the portfolio, making up the rest. That's a fairly reasonable mix, noting that medical office properties have been attractive assets as more health care services are being performed outside hospitals.

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Source Fool.com