Diversified Healthcare Trust: Time To Buy The 50% NAV Discount And 7.5% Yield

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About: Diversified Healthcare Trust (DHC), Includes: EQC, FVE, RMR
by: The Boy Plunger
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The Boy Plunger
Long/short equity, special situations, hedge fund manager
Summary

Following a major tenant restructuring and dividend cut, stock has been punished, trading at a 20-year low and a 50% discount to NAV, providing a compelling risk-reward proposition.

Senior housing industry fundamentals may be at a positive inflection point, which would be a significant positive catalyst for the stock.

We think the recent destruction of value and discounted valuation could bring an activist investor to push for a sale of the company and or termination of the RMR agreements.

Following the dividend reduction, the stock now offers a well-covered 7.5% dividend yield, compensating investors while they wait for the NAV gap to narrow.

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Thesis

Following a major tenant restructuring and dividend cut (details here), DHC (formerly SNH) (NASDAQ:DHC)