Healthpeak Properties' Monthly Dividend Strategy: A High-Yield REIT's Balancing Act

In the high-yield REIT landscape, Healthpeak Properties (NYSE: DOC) has long been a fixture for income-seeking investors, offering a blend of stability and regular cash distributions. However, as the company transitions to monthly dividend payments in 2025, questions about the sustainability of its payout strategy have intensified. With a staggering 484.3% dividend payout ratio reported in the first half of 2025, according to FullRatio, Healthpeak's ability to maintain its dividend while navigating declining profitability demands closer scrutiny.

A Decade of Dividend Discipline-But at What Cost?

Healthpeak Properties has maintained a consistent dividend policy since 2020, initially distributing $1.48 per share annually before adjusting to $1.20 per share in 2021, according to DividendInvestor. This pattern persisted through 2023, with the company retaining its quarterly payout structure. In 2024, the annual dividend remained unchanged, but 2025 marked a pivotal shift: the company began distributing $0.102 per share monthly, effectively increasing the annual payout to $1.22 per share, as DividendInvestor's dividend history shows. While this transition to monthly distributions may appeal to investors seeking more frequent income, it raises concerns about the company's capacity to fund these payments.

According to a report by MarketBeat, Healthpeak's net income declined from $411 million in 2020 to $242 million in 2024, even as revenue grew to $2.42 billion. Meanwhile, free cash flow has remained robust, reaching $977.62 million in 2024, per TradingView. This divergence between earnings and cash flow suggests the company is relying on non-operational liquidity-such as asset sales or debt financing-to sustain its dividend.

The Payout Ratio Paradox

The dividend payout ratio, a critical metric for assessing sustainability, has become a red flag for Healthpeak. In 2025, the company's payout ratio surged to 484.3%, as FullRatio reports, meaning it is distributing more in dividends than it generates in net income. For context, industry benchmarks for REITs typically range between 60% and 100%, per the TradingView cash-flow data. A payout ratio exceeding 100% indicates that a company is paying out more in dividends than it earns, often through cash reserves or debt.

This unsustainable trajectory is underscored by Healthpeak's Q2 2025 earnings report, which revealed a 76.19% year-over-year decline in net income per share to $0.05, according to MarketBeat. Over the trailing twelve months, diluted EPS fell 46.81% to $0.25, MarketBeat also reports. These figures highlight a widening gap between dividend obligations and earnings, raising concerns about the company's ability to maintain its payout without external financing.

Strategic Value in a High-Yield Environment

Despite these risks, Healthpeak's monthly dividend structure offers strategic advantages in a competitive REIT market. By shifting to monthly payments, the company aligns itself with investor preferences for frequent income streams, potentially attracting a broader base of retirees and income-focused portfolios. Additionally, Healthpeak's strong operating cash flow-$1.07 billion in 2024, per MarketBeat-provides a buffer to support its dividend, even as net income declines.

However, this strategy hinges on the company's ability to manage its balance sheet effectively. As stated by a Wall Street Journal analysis, Healthpeak's 2024 cash flow statements reveal a net outflow of $941 million in financing activities, primarily due to debt repayments and dividend payments, a point also noted in MarketBeat's financials. This suggests that the company is leveraging its capital structure to fund distributions, a practice that could become untenable if interest rates rise or liquidity tightens.

Conclusion: A High-Yield Gamble?

Healthpeak Properties' monthly dividend policy reflects a calculated attempt to retain its position in the high-yield REIT sector. While the company's free cash flow and operating cash flow provide short-term support for its payout, the 484.3% payout ratio in 2025 signals a precarious balance between investor expectations and financial sustainability. For investors, the key question is whether Healthpeak can stabilize its earnings or secure alternative funding sources to avoid a dividend cut-a scenario that would likely erode investor confidence.