HCP cuts dividend by 35.7% after QCP spin-off

Last month Dividend Aristocrat HCP Inc (HCP) announced that it will pay a quarterly dividend of $0.37 per share following the Quality Care Properties (QCP) spin-off.

On October 31, 2016, HCP common stockholders received one share of QCP common stock for every five shares of HCP common stock they held on October 24, 2016, the record date for the Spin-Off. HCP common stockholders received cash in lieu of fractional shares of QCP.  Following the Spin-Off, HCP's common stock will continue to trade on the NYSE under the symbol "HCP."

The new quarterly dividend of $0.37 per share has been paid on November 25, 2016 to stockholders of record as of the close of business on November 10, 2016.

Dividend Aristocrat HCP had raised its dividend for 31 consecutive years prior to the November 1, 2016 dividend announcement. It's unclear what the consequence is for HCP's Aristocrat status, partially because QCP has not declared a dividend yet. If the combined dividend of HCP and QCP is at least equal to the 'old' HCP's dividend, the health care REIT could theoretically maintain its status as a Dividend Aristocrat, similar to Abbott Laboratories and AbbVie following their separation.

However, it is striking that HCP didn't mention the fact that it has raised its dividend for 31 years in it's latest dividend announcement, in contrast to the prior dividend declaration from July 28, 2016.

The new annual dividend of $1.48 for HCP translates into an estimated dividend yield of 4.9% based on the current $30 stock price.

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