National HealthCare Boosts Quarterly Dividend 4.2% (NHC)

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National HealthCare Corporation (AMEX: NHC) will hike its upcoming quarterly dividend payout amount 4.2% to mark the 14^th consecutive annual dividend boost.

At present, NHC offers a 2.8% yield that outperforms the industry average yields by a wide margin. In terms of share price performance, the company suffered a 15-month decline starting in December 2016 that limited the gain over the past 12 months to a mere 1.0%. However, the stock is back in an uptrend that could bring the total return rates back into double-digit percentage levels.

Investors interested in obtaining the 4.2% higher dividend payment should strive to own shares of NHC before the June 28, 2018 ex-dividend date. The pay date occurs a month later on Aug. 31, which is a longer than the normal timeframe between these two dates

National HealthCare Corporation (AMEX:NHC)

Based in Murfreesboro, Tennessee and founded in 1971, the National HealthCare Corporation operates, manages and provides services to skilled nursing, assisted living and independent living facilities, as well as home healthcare programs. The company’s facilities offer licensed therapy, nutrition, housekeeping and laundry services, with additional potential services including prescribed medical and rehabilitative services for patients. Furthermore, the company also owns, leases and manages independent living facilities and offers various ancillary services for its residents, including restaurants, activity rooms and social areas. National HealthCare also leases its properties and provides management, accounting, financial and insurance services to third-party operators. As of March 2018, the company and its affiliated third-party operators operated 76 skilled nursing centers with approximately 9,700 beds, 36 homecare programs, five residential living centers and 24 assisted living communities.

After spiking to its all-time high at the end of 2016, NHC’s share price reversed direction and embarked on a downtrend that lasted deep into the trailing 12-month period. Over the 15-month decline, shares fell over 25% before hitting a 52-week low of $57 on February 6, 2018. Since then, NHC has recovered almost all of its losses, closing around 7% below the December 2016 high at $72.37 on June 19, 2018.  This closing price is 1% above the 52-week high and also 1% above the price from one year earlier.

The upcoming quarterly dividend distribution of $0.50 per share will constitute a $0.02, or 4.1%, increase over the prior quarter’s $0.48 quarterly dividend payout. Four payments of $0.50 every year amounts to an annual distribution of $2.00 and a forward yield at current prices of 2.8%. When NHC shares were at their year low, the dividend yield rose to as high as 3.2%. However, even after the recent price increase, the 2.8% yield is still 7.7% higher than the company’s own 2.6% average yield over the past five years.

Comparing the current 2.8% yield against other metrics, it is 300% higher than the 0.66% average yield of the entire Healthcare sector, which generally has very low yields. Even compared to stronger yields, such as the average 1.29% yield of all the companies in the Long-Term Care Facilities industry segment, NHC’s yield is still almost 120% higher.

National HealthCare has enhanced its total annual payout every year since it paid its first quarterly dividend in 2004. Over the past 14 years, the total annual dividend amount ascended 300%, which corresponds to an average growth rate of 10.4% per year.

Because the share price declined for most of the trailing 12 months, the shareholders’ total return of 1% was barely over the breakeven point. However, the total return over the past three years was nearly 21% and the total return over the last five years cam in at nearly 70%.

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