Consider SNR Stock for its High Dividend Yield
Today, the focus is on an investment opportunity that is yielding more than 10% annually. That means, even without calculating stock price appreciation, there will be a return in the double digits, based on the initial capital invested in the company.
The business in question is real estate investment trust New Senior Investment Group Inc (NYSE:SNR). The company’s 150-plus properties—which make up 60% of its portfolio—are used for senior housing, including independent living, retirement communities, and assisted living/memory care locations.
SNR stock is currently offering a dividend yield of 10.06%, with said dividend paid on a quarterly basis. Such properties provide income not only from rental fees, but also from capital appreciation, reducing operating risk.
Such an investment comes with a few benefits. For starters, there will be income received via the dividend no matter how the stock market is performing. There is also no need to time the market to determine when to buy and sell shares; the income would be received regardless.
Second, when the markets are not performing well, such as in a recession, stocks that pay a dividend tend to outperform those that don’t. Dividend-paying stocks also tend to have more downside risk protection in a down market because more investors are attracted to them. That’s because of their steady payouts and reduced volatility, which are both means of capital preservation
Lastly, a company that pays a dividend tends to be more disciplined with its finances. This is normally due to the fact that the company’s earnings would need to be reported, as well as available to pay a dividend. As a result, any business decision regarding buying or selling assets will always be made after careful consideration.
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Further, there is always the potential for the dividend income to grow, which appears to be on the horizon for New Senior. According to a study by the U.S. Census Bureau, the senior population in the country will soon account for more than 20% of the total population, going from 313 million people to 399 million. In 2012, seniors made up fewer than 15% of the total population. And with more seniors will come increased demand for New Senior properties. (Source: “An Aging Nation: The Older Population in the United States,” United States Census Bureau, last accessed July 26, 2017)
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Final Thoughts About SNR Stock
Being an income investor is difficult at times, with savings and certificates of deposit offering very little return. Therefore, investors should consider an alternative method of earning income.
It’s not every day that a dividend stock that offers a double-digit yield with potential further growth. Holding the stock long enough could result in some extra gains, because a higher income would be received on a per-share basis as more time is spent holding the investment.