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Dividend Aristocrats in Focus, Part 3: HCP

- By Ben Reynolds

Real Estate Investment Trusts (REITs) are required by law to pay out 90% or more of their earnings as dividends.

This makes it difficult to pay rising dividends every year. There's very little margin for error because the payout ratio is so high.

If earnings fall (and every business has setbacks eventually), then there's a good chance dividends will fall as well for a REIT.