I have owned SNH for about 10 years, and have gone through what seems like a secondary offering every 18 months - almost on schedule. Although it depresses the stock price, it adds value to the company, as they use the proceeds to buy new income streams (properties) and to pay down debt. When I bought, the dividend was .30 a share per quarter, now it is up to .39 - I have "made" about 5 bucks a share, but my yield the original shares is now about 14%. I am buying more on Monday, because at 7.30% and a strong balance sheet and income growth, there is not much better out there.
Here's another way of looking at the dividend. Starting with the $0.30/share quarterly dividend in 2001, the current dividend rate of $0.38/share (announced 10/4/11) represents something like a 2.4% annual compound growth rate. That's not terrible (mostly offsets inflation), especially when combined with today's 7% dividend yield, but you would think SNH would be able to generate a bit more growth given all the acquisition / share issuance activity, especially during the last year. In fairness to the company, SNH does tend to utilize less leverage than most, and this has probably weighed on growth versus peers. We'll see what 2012 brings.