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Special Situation: AdCare 10% Yield?

AdCare Raises Dividend Again, A 10% Yield is In Sight by TMF Deej aka Jason Knapp [first appeared here]

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AdCare Health Systems is a fascinating special situation. The Cliff's Notes version of the story is that AdCare was a money-losing operator of senior living facilities that decided to change course from a lousy facility operator to a REIT-like property owner. The company brought in a new, experienced CEO, Bill McBride, in the fall of 2014 to facilitate the transition and by all accounts he has done a solid job. AdCare announced in late July that it has essentially completed its planned transition from operator to owner:

AdCare Has Now Entered Into Agreements for All 40 Facilities; Signed Agreements to Sublease Three Remaining Properties [link]

Despite the fact that the company successfully accomplished this dramatic transition in a timely manner, AdCare has been punished by Mr. Market in conjunction with many other yield instruments over the past year.

This morning, the company's stock is up more than 3.5% on news that it has increased its dividend by 9.1% to $0.06 per quarter or $0.24 annually. This bump pushes the company's yield to an attractive, rapidly-growing 7.3%.

AdCare Board Declares a Quarterly Cash Dividend of $0.06 per Share of Common Stock [p>