Updated April 2025
Universal Health Realty Income Trust, or UHT for short, has been quietly doing what a lot of REIT investors wish more companies would—providing a steady, long-term stream of income. Since launching back in 1986, UHT has focused on owning and leasing out healthcare-related real estate. Think hospitals, surgical centers, and medical office buildings. These aren’t speculative properties; they’re essential infrastructure for healthcare providers, often operated under long leases.
The trust’s primary tenant is Universal Health Services (UHS), which manages many of the facilities in its portfolio. That tie-in has helped give the company a level of reliability when it comes to cash flow, and that’s a big deal for dividend-focused investors.
Now, let’s dig into what’s been happening recently and what it all means for those who rely on UHT for income.
Recent Events
As of April 2, shares of UHT closed at $41.08. But in the early hours of the following day, the stock slipped to $38.06 in pre-market trading—a drop of more than 7%. For a REIT with historically low volatility (a beta of just 0.88), that’s a sizable move.
There wasn’t a single smoking-gun announcement behind this sudden slide, but there has been a broader pressure on REITs as markets digest the ongoing implications of interest rate policy. High debt levels and rising borrowing costs don’t usually mix well. And with UHT’s debt-to-equity ratio sitting over 200%, it’s understandable that investors might be a little jittery.
Still, that kind of reaction often presents a disconnect between sentiment and long-term fundamentals, especially for a REIT as established and steady as this one.
Key Dividend Metrics
📈 Forward Dividend Yield: 7.16%
💵 Forward Annual Dividend: $2.94 per share
📊 5-Year Average Dividend Yield: 5.69%
🎯 Payout Ratio: 210.07%
📅 Next Dividend Date: Paid March 31, ex-dividend March 24
📈 Trailing 12-Month Dividend Growth: Up slightly from $2.92
📆 Consecutive Years of Dividend Increases: Over 38 years
Dividend Overview
Here’s what makes UHT so appealing for income investors: it’s consistent. The dividend yield is over 7% right now, which is well above its own five-year average and certainly higher than most alternatives with similar risk profiles.
That consistency didn’t come out of nowhere. UHT has been steadily increasing its dividend every year since the late 1980s. These aren’t flashy increases, just slow, measured bumps that reflect the company’s careful approach to cash management and shareholder returns.
One stat that might raise an eyebrow is the payout ratio. At just over 210%, it might look like UHT is paying out more than it earns. But this is where you have to understand REIT accounting. Traditional net income isn’t always the best measure for companies that own depreciating assets like buildings. Instead, what matters more is operating cash flow—and here UHT looks a bit more balanced.
With operating cash flow of $46.91 million and about 14 million shares outstanding, that works out to around $3.36 per share in cash flow. Compare that to the $2.94 per share in dividends, and the picture becomes clearer. They’re not being reckless. The coverage is tight, but not alarming.
Dividend Growth and Safety
UHT doesn’t offer wild dividend growth. In fact, it’s one of the slowest growers in the REIT world. But that’s not necessarily a bad thing. For income-focused investors, the priority is usually sustainability, not speed. A penny a year increase might not move mountains, but it adds up over decades—and UHT has the track record to prove it.
The trust is run conservatively. It doesn’t go on buying sprees or issue tons of new shares. That helps preserve the value of existing shareholders’ income stream. It also means UHT doesn’t stretch itself too thin when market conditions become tougher.
One area to keep an eye on is debt. With $379 million in total debt and interest rates remaining relatively high, those costs are going to be a bit more noticeable. However, UHT has a strong current ratio of 10.68, meaning it can comfortably cover short-term obligations. Its EBITDA margin also comes in around 65%, giving it some cushion to work with.
Beyond the numbers, UHT operates in one of the most durable corners of the REIT universe. Healthcare real estate doesn’t follow the same boom-and-bust cycles as retail or office space. Demand for medical services remains steady through recessions, which means tenants tend to be more stable. That adds another layer of security to the income stream.
Another reassuring factor: insiders own just over 8% of the company. That’s not enormous, but it’s meaningful. When people who run the business have a decent personal stake, their interests tend to align better with shareholders.
While the dividend isn’t without pressure—particularly in a high-rate environment—it’s hard to ignore the longevity and resilience behind UHT’s income story.
Cash Flow Statement
Universal Health Realty Income Trust’s cash flow statement over the trailing twelve months shows consistent strength in operational efficiency. The company generated $46.9 million in operating cash flow, roughly in line with prior years and reflective of the reliable rent income from its healthcare-focused properties. Free cash flow matched that figure, indicating minimal capital spending reported for the period and leaving a clean view of cash available to support dividends and debt obligations.
On the investing side, outflows totaled nearly $13.9 million, mainly related to property investments or improvements, though notably down from 2021 and 2022 levels. Financing activities saw a net outflow of $34.1 million, driven by dividend payments, partial debt repayments, and a modest $131,000 in share repurchases. Debt issuance of $22.3 million helped offset some of those costs. At the end of the period, UHT held $7.1 million in cash, a stable position that keeps liquidity intact without overextending. Interest expenses continued to rise, reaching nearly $18 million, showing the ongoing effect of higher rates on debt servicing costs.
Analyst Ratings
📉 Universal Health Realty Income Trust (UHT) has recently seen cautious sentiment from analysts. The most current data shows a single analyst rating the stock as a Sell, with a price target set at $33.00. This implies a potential downside from its April 2 closing price of $41.08, reflecting concerns about valuation and financial leverage.
📊 The downgrade appears to stem from a few key concerns. One of the most prominent is UHT’s high payout ratio, currently sitting at 210.07%. That level suggests the company is distributing more in dividends than it’s earning in net income—a red flag for those watching dividend sustainability. At the same time, UHT’s debt-to-equity ratio of 211.19% points to a highly leveraged capital structure. In an environment where borrowing costs remain elevated, that kind of debt load makes some investors nervous.
🧮 What also stands out is the lack of broader analyst coverage. With only one rating in place, there’s very limited consensus or diversity of opinion in the market. That makes it difficult to weigh this downgrade against any bullish counterpoints. For investors, it may mean the stock is under the radar, or it may reflect how niche the business is within the healthcare REIT sector. Either way, current sentiment is leaning cautious.
Earning Report Summary
Solid Finish to the Year
Universal Health Realty Income Trust wrapped up 2024 on a positive note, showing steady momentum in its core financials. For the fourth quarter, the trust posted net income of $4.7 million, which breaks down to about $0.34 per diluted share. That’s a nice bump from the $3.6 million, or $0.26 per share, they reported during the same stretch last year. Most of that lift came from increased rental income and some tight expense management.
Over the full year, net income climbed to $19.2 million, or $1.39 per share—again, an improvement from 2023’s $15.4 million, or $1.11 per share. Nothing flashy, just consistent performance driven by reliable tenant relationships and thoughtful portfolio growth.
FFO Keeps Climbing
For REIT investors, Funds from Operations (FFO) is the real litmus test, and UHT delivered here too. In Q4, FFO came in at $11.8 million, or $0.85 per share, a slight uptick from the prior year’s $11.4 million, or $0.83 per share. Over the full year, they posted $47.9 million, or $3.46 per share, up from $44.6 million and $3.26 in 2023. It’s a subtle increase, but one that signals healthy underlying cash flow—something dividend-focused investors always want to see.
Revenue and Property Progress
Revenue nudged higher as well. UHT pulled in $24.6 million in Q4, just above the $24.3 million from the same quarter last year. Full-year revenue came in at $99 million, up from $95.6 million previously. This growth mostly came from a few well-placed property acquisitions and solid leasing activity across their healthcare real estate portfolio.
One development that stood out was the Sierra Medical Plaza I in Reno, Nevada. It’s now 68% leased and still in ramp-up mode, with a projected cost of about $35 million. As it fills out, that asset should add even more stability to the top line.
Managing the Balance Sheet
On the financing front, UHT made some smart moves. They expanded their credit agreement from $375 million to $425 million and locked in part of their interest exposure with a new swap covering $85 million at a fixed 3.27%. With interest rates staying sticky, this kind of hedging helps keep things predictable and protects cash flow over the long term.
All in all, UHT didn’t make headlines with its latest numbers—but that’s part of the appeal. It just keeps doing what it’s built to do: generate reliable income and grow at its own steady pace.
Chart Analysis
Price Trend and Moving Averages
The chart shows a steady rise in price from late spring through the early fall of last year, followed by a broad consolidation and some choppiness into the winter months. After peaking above $45 in October, the stock retraced, testing support near $35 before recovering into the $38–$40 range more recently. What stands out is the recent crossover where the 50-day moving average is climbing back above the 200-day line—often seen as a sign of renewed strength or a potential shift in sentiment.
Throughout much of last year, the 50-day average remained above the 200-day, which supported the uptrend into the fall. The breakdown in December was brief, and now that both lines are converging again with the shorter average curling upward, there’s a constructive tone returning to the chart.
Volume and Participation
Looking at volume, there were notable spikes during periods of price reversal, especially during the sharp drop in late December. These high-volume days likely reflect institutional activity—either stepping in to buy the dip or taking profits. More recently, volume has picked up again during the push toward the $40 level, showing continued interest as the stock regains ground. That’s encouraging to see after a volatile stretch.
RSI and Momentum
The Relative Strength Index (RSI) has been fairly well-behaved. It didn’t spend much time in extreme overbought territory, even during last summer’s rally, and it’s mostly bounced between the 40 and 70 range. Dips into the low 30s in December and again in January lined up with price bottoms and were followed by solid recoveries. At the moment, RSI is trending higher but still below overbought levels, suggesting there may be more room to run before momentum starts to fade.
Overall Picture
This chart tells the story of a stock that went through a strong rally, took a healthy breather, and is now working to re-establish its footing. The structure has remained intact, with the price holding well above last spring’s lows and now starting to build a new base. Momentum and moving averages are turning supportive again, which could set the stage for more stable price action if this trend continues.
Management Team
Universal Health Realty Income Trust (UHT) is led by a stable, experienced team that has been at the company’s core for decades. At the top is Alan B. Miller, who has served as Chairman of the Board, President, and Chief Executive Officer since UHT was established in 1986. Miller also founded Universal Health Services (UHS), one of the country’s leading hospital operators, which provides additional depth and perspective to UHT’s healthcare focus.
Alongside him is Charles F. Boyle, the Senior Vice President and Chief Financial Officer. Boyle has been with the trust since the early ’90s and took on the CFO role in 2003. His financial leadership has helped maintain consistency in reporting and capital allocation through various market cycles.
Another long-serving member of the leadership team is Cheryl K. Ramagano, Senior Vice President of Operations, Treasurer, and Secretary. Ramagano has been integral to the trust’s daily operations since 1992, managing treasury functions and operational oversight with a steady hand. Collectively, this leadership team offers deep knowledge of the healthcare REIT space and has guided UHT through multiple market environments with a consistent, long-term focus.
Valuation and Stock Performance
As of early April 2025, UHT is trading around $41.08. The stock has shown moderate growth over the past five years, with a total return of just over 40 percent. While this trails broader market benchmarks, UHT’s value lies more in its steady income and lower volatility rather than rapid capital appreciation.
The current price-to-earnings ratio sits around 29.6, which is high for a REIT and suggests that investors are still assigning a premium to its dependable dividend history and specialized healthcare portfolio. This isn’t the kind of stock that gets cheap in traditional valuation terms, but rather one that holds its ground because of consistent results and reliable income.
Return on assets stands at 3.27 percent—modest, but reasonable within the REIT sector, where large depreciating property portfolios often weigh on this metric. UHT also maintains a consistent dividend yield that’s well above average, backed by decades of uninterrupted payments and annual increases. For income-driven investors, this reliable stream has long been the primary draw.
Risks and Considerations
There are a few notable risks to keep in mind. One is UHT’s relatively high level of leverage. With a debt-to-equity ratio above 2.0, the trust relies heavily on borrowing to fund its operations and growth. This isn’t unusual for a REIT, but in today’s interest rate environment, higher financing costs could tighten margins and leave less room for flexibility.
Another point of consideration is UHT’s close business relationship with Universal Health Services, which operates many of the trust’s leased properties. While this relationship has historically been a strength, it also creates some tenant concentration risk. If UHS were ever to face financial or operational issues, it could have a ripple effect on UHT’s cash flow and property occupancy.
Broader industry risks include healthcare policy changes, regulatory shifts, and local market dynamics. Although healthcare real estate tends to be more stable than other sectors, it’s not immune to disruption—particularly if reimbursement models or facility demands shift over time. These changes could impact leasing terms, property valuations, and long-term tenant stability.
Final Thoughts
Universal Health Realty Income Trust continues to stand out as a healthcare-focused REIT with a long-term orientation and a history of disciplined management. The company’s leadership team has been in place for decades and has consistently prioritized operational efficiency and shareholder returns.
While the stock doesn’t come cheap based on traditional valuation metrics, the trade-off has always been stability, predictability, and income. Its reliable dividend, conservative property management, and alignment with healthcare services give it a unique position in the market.
That said, it’s important to be aware of the challenges—especially around leverage and tenant concentration. These aren’t dealbreakers, but they are parts of the picture that require monitoring.
In the end, UHT represents a focused approach to healthcare real estate. It moves at its own pace, doesn’t chase headlines, and continues to reward investors who value steady cash flow over fast gains.