How Welltower's Dividend Cut Will Help It Grow

Dividend investors hate dividend cuts, and for good reason. Before you cut and run, however, you should step back and think about what a cut means for the specific company in question. In the case of real estate investment trust Welltower (NYSE: WELL), it's a sign of near-term obstacles. But it will also position the healthcare-focused landlord for faster growth once this rough patch is over. Here's what you need to know.

There's no easy way to deal with COVID-19 -- at least, not yet. It tends to spread easily in group settings, and the elderly are more at risk than younger age cohorts. That's a terrible combination for real estate investment trusts (REITs) that own senior housing, like Welltower. The company generates roughly 70% of its net operating income from senior housing, spanning from well-living facilities to nursing homes. The still-spreading coronavirus is a very big deal for the REIT.

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Source Fool.com