$314.41 – Passive Healthcare REIT Income

We love passive income here at Max Out of Pocket.

For someone who has been going on and on about passive income for months now, we haven’t seen much of it here on the blog. That’s because I haven’t gotten any. Well, July 18, 2019 was a very special day for the Max Out of Pocket REIT portfolio. We finally got our first dividend since I began documenting this experiment.

I received $314.41 on July 18th from Physicians Realty Trust (DOC). This comes out to $0.23 per share.

$0.23 X 1,367 Shares = $314.41

If you need to catch up, I built a custom page that documents this experiment.

DOC pays dividends every three months and I like to consider these quarterly rental payments for the medical office buildings we own. The rental payments are passed on to me from Physicians Realty Trust in the form of a cash dividend. Since I hold shares of Physicians Realty Trust in two separate accounts, it actually comes in through two separate transactions:

$214.13 + $100.28 = $314.41

Here is another slightly obnoxious look at the same information:

The four Cs. Cat, coffee, cash, and Canada.
My REIT portfolio sends me dividends even when I am relaxing with my feet up.

But we can’t stop there; we need to learn a bit more about this process. We already know how Physicians Realty Trust makes me money, but we haven’t seen the actual mechanics of it yet.

Dividend Approval

The first step in getting my dividend is waiting for our Board of Trustees to authorize the dividend payment. Physicians Realty Trust announced this on 6/21/2019 for the quarter ending 6/30/2019. The Board authorized a payment of $0.23 per common share. Here is the exact press release:

MILWAUKEE–(BUSINESS WIRE)– Physicians Realty Trust (NYSE:DOC) (the “Company”) announced today that the Company’s Board of Trustees has authorized and the Company has declared a quarterly cash dividend of $0.23 per common share and unit for the quarter ending June 30, 2019.

6/21/2019 Company Press Release

They go on to say that this dividend will be paid out to common shareholders of record July 3, 2019. That made the Ex-Dividend date July 2, 2019. To be considered a shareholder on the record date and score the $0.23 dividend, someone like Max OOP needs to own the stock before the Ex-Dividend date. 

This means everyone who owned the stock at the end of business day July 1, 2019 would be entitled to the dividend. So if I loaded up on more shares July 2nd or 3rd, I would not get the dividend. Instead, the seller who sold it to me would get it. 

I was actually on vacation during the first week of July, but I did manage to load up on 90 more shares of DOC on July 5, 2019 for just over $1,500. It was technically payday, and since I am loosely applying dollar cost averaging principals to this investment, I needed to take a 2 minute break from vacation and buy up some more medical office buildings. Pretty amazing that I can conduct over $1000 of business on my phone during a two minute break from vacation. Since I didn’t own the new shares by July 1, 2019, I didn’t get the dividend on them.

Whoever sold me these got the dividend.

Yield

We talked about yield earlier this year. At the close of the market July 3, 2019 (the dividend record date), DOC stock price settled at $17.50. Since our projected dividend payment was $0.92 per share for the next year, our yield at the time of the dividend record date was 5.25%. Much better than my bank account, but a little more risk also comes with these medical office buildings.

$0.92 / $17.50 = 5.25%

When you consider the entire company, we aren’t talking small dollars here. For the quarter ending 3/31/2019, for example, there were over 180 thousand shares of DOC out there on the market. With each one paying the $0.23 dividend, we are talking well over 40 million dollars being shelled out to shareholders. 

Payment

The dividend will be payable on July 18, 2019, to common shareholders and unit holders of record on July 3, 2019.

6/21/2019 Company Press Release

A couple weeks went by before I got the actual dividend payment. I didn’t have to lift a finger to make this transaction possible. It was all handled for me behind the scenes by Physicians Realty Trust and my brokerage account. Meanwhile, Max OOP was busy vacationing and visiting four New England States (Massachusetts, New Hampshire, Maine, and New York). We technically drove through the beautiful state of Vermont as well. My medical office building portfolio does not get to rest and vacation, it is always working for me. 

Final Thoughts

There is a lot I could do with $314.41, but in my mind, there was only one way to celebrate.

I took my $314.41 in cash and turned around and invested it right back into Physicians Realty Trust a day later on 7/19/2019. This dividend was able to help me purchase approximately 18 more shares, which will provide about $16 in annual dividends going forward. See how that works? We use our dividend making machine, to make even more dividends. As much as Max OOP loves passive income, I love compounding interest even more. Afterall, it is one of the strongest forces in the universe according to Albert Einstein. Maybe even stronger than the highest tides in the world?

Since it was payday, I also put another $1,250 of my own hard earned dollars into DOC to round the purchase out at about $1,500 for a total of 90 more shares. These 90 shares will provide about $79 in dividends over the next year.  

Now we sit around with our feet up for the next 3 months, letting healthcare providers and patients use our medical office buildings and pay rent. Since we know we have quality tenants living in our medical office buildings, I am willing to bet the byproduct of that activity will be another dividend payment at some point in October. Apparently the CEO agrees with me as this was also noted in the press release mentioned above. Looks like I have another conference call to listen in to.

“We are proud to declare and pay our 24th consecutive quarterly dividend. Our commitment to the acquisition and management of high-quality medical office facilities occupied by leading health care providers delivering outpatient care remains unchanged, continuing to deliver strong cash flows for our investors. We look forward to discussing our second quarter results when we release earnings and during our conference call, scheduled on August 7th,” said John T. Thomas, President and Chief Executive Officer. 

6/21/2019 Company Press Release

Other News

We haven’t been too busy around here at the blog. We had family in town on and off for over two weeks and also did some light traveling through New England. As I mentioned above, I was able to create a page to help track this experiment. I plan on keeping this updated monthly going forward. Feel free to check it out.

The REIT portfolio broke the $25,000 mark we are trying to get to with these last two purchases. We would have gotten there sooner, but the stock price has been sliding in recent weeks. I don’t really care because this is a 5-10 year investment. Regardless, it is projected to generate just over $1,400 in dividends over the next year.

Usual disclaimer. This is not a recommendation to buy or sell this or any other stock. You are responsible for your own investing decisions and need to do your own research before making those decisions.

How is your summer going?

Share

Leave a Reply

Your email address will not be published. Required fields are marked *