Healthcare Trust's HTIBP: A Steady Pillar of Income Amid Volatility

Healthcare Trust of America's 7.125% Series B Preferred Stock (HTIBP) has emerged as a compelling income-generating asset in an era of economic uncertainty. With a forward dividend yield of 12.08% as of June 2025, this perpetual preferred stock offers a rare combination of stability and high returns. But what makes HTIBP stand out in a crowded preferred stock market? Let's dissect its dividend discipline, portfolio underpinnings, and strategic advantages.

The Dividend Consistency Factor

HTIBP's allure begins with its unwavering dividend track record. Over the past year (through June 2025), the stock has maintained quarterly ex-dividend dates every three months, most recently on January 3, 2025, with a payout of $0.4453 per share on January 15. This pattern stretches back to at least 2024, with no missed payments despite rising interest rates and geopolitical tensions. The dividend amount has remained fixed at $0.4453 per quarter since 2022, preserving the annualized yield of ~7.125% (though market price fluctuations have boosted the forward yield to over 12% due to recent price declines).

This consistency is critical for income investors. The ex-dividend dates—typically set two days before the record date—ensure predictable eligibility for payouts. For instance, owning HTIBP by October 4, 2024, guaranteed receipt of the October 15 dividend. This predictability contrasts sharply with common stocks, where dividends are often discretionary.

The Healthcare Real Estate Anchor

Behind HTIBP's resilience lies Healthcare Trust's core portfolio: over 1,000 healthcare properties including hospitals, medical office buildings, and senior living facilities. These assets serve essential healthcare services, which are less sensitive to economic downturns compared to retail or office real estate. Even as occupancy rates in other sectors falter, healthcare demand remains robust, underpinning rental stability.

The company's 2024 rebranding to National Healthcare Properties, Inc. and internalization of management—eliminating costly external fees—has further strengthened its balance sheet. With reduced expenses and a $1.5 billion+ liquidity buffer, Healthcare Trust is well-positioned to sustain dividends despite macroeconomic headwinds like rising interest rates.

Dividend Sustainability in a Stress-Tested Sector

Critics might question whether HTIBP's high yield signals risk. However, three factors mitigate concerns:
1. Cumulative Dividends: Missed payments accumulate, ensuring preferred shareholders are prioritized over common stockholders.
2. Perpetual Structure: No maturity date means no refinancing risk, unlike bonds.
3. Sector Strength: Healthcare real estate's defensive nature has shielded occupancy (averaging 95%+) even as broader commercial real estate struggles.

HTIBP's yield has historically outpaced Treasury rates, offering a compelling risk-adjusted return. While rising rates pressure preferred stock prices, the dividend's fixed nature provides ballast in low-rate environments.

Investment Considerations

• For Whom? Ideal for income-focused investors willing to accept interest rate risk. Avoid if you require principal stability in a rising rate environment.
• Risks: Geopolitical conflicts, tenant defaults, or a sharp economic slowdown could strain occupancy. The stock's delisting risk (noted in filings) adds a minor caution flag.
• Entry Point: The current price (~$14.24 post-January ex-dividend drop) reflects reduced demand, but the 12% yield offers a margin of safety.

Conclusion: A Steady Hand in Turbulent Markets

HTIBP's blend of high yield, quarterly reliability, and a defensive healthcare portfolio positions it as a standout choice for income investors. While not immune to macro risks, its dividend sustainability is underpinned by a fortress balance sheet and an essential asset class. For those prioritizing steady payouts over short-term capital gains, HTIBP remains a pillar worth considering—even as markets tremble.

Invest wisely, and hold onto the dividends.