| CareTrust REIT (NYSE: CTRE) has been a big winner in my Oxford Income Letter portfolio, with a total return of 173% in the 3 1/2 years since I recommended it. Part of that total return has been from the company's dividend yield. The current yield is 3.7%, though Oxford Income Letter subscribers who bought it when it was first recommended are earning over 8% annually on the original price. Whether you're earning more than 8% or today's 3.7% or anything in between, you need to feel confident that the dividend is safe. Let's dig in and see if it is. CareTrust REIT leases nursing homes and assisted and independent living facilities to operators. It has over 400 properties across 35 states and another 130 properties in the U.K. Because CareTrust is a REIT (real estate investment trust), we use a measure of cash flow called funds from operations, or FFO. In 2024, FFO grew 66% to $331 million. Over the past three years, it has grown by an average of 17% per year. That's exceptional. This year, that growth is forecast to slow to 8%, with FFO coming in at $359 million. In 2026 and 2027, growth is expected to accelerate into the double digits again. CareTrust REIT paid shareholders $172 million in dividends last year for a payout ratio of just 52%. This year, the projected $189 million in dividend payments should result in a payout ratio of 53%. |