Kindred Healthcare, Inc (KND), a healthcare services company in the long-term care facilities industry, suddenly cut its dividend last year so we look at how that may play out for 2018.
KND, through its subsidiaries, operates hospitals, nursing centers, and contract rehabilitation services businesses across the United States. It is headquartered in Louisville, Kentucky. I use three primary keys to measure dividend equities or funds like Kindred Healthcare, Inc.:
(1) Price
(2) Dividends
(3) Returns
Besides those three main keys I’ll use four more to finally unlock an equity or fund in which to invest.
These first three keys test whether the company has made, is making, and will continue to make money.
KND Price
Kindred Healthcare, Inc.’s price at Friday’s market close was $9.80 per share. The company has positive momentum. Just a year ago its price was $8.00. That’s a gain of $1.80 in the past year. Can KND do as well in the coming year? If it does, its price will increase from $9.80 to $11.60 per share, or about 18%.
KND Dividends
The company’s most recent variable annual dividend was $0.12 declared in February 2017, and paid March 9th. The company has discontinued dividends without notice.
Are Gains Ahead For KND?
Adding no dividend to the $1.80 potential upside from a repeat of 2017’s price performance projects a possible $1.80 gross gain but two brokerage analysts’ price targets show KND’s price declining to $9.00.
Future results for KND depend on how many shares are bought. A $1,000.00 budget to buy shares at KND’s last $9.80 closing price would let us purchase 102 shares.
Those 102 shares will be hit with a broker fee of about $5 at purchase and another $5 at sale (for a total of $10 to get any gains). Each share then has a brokerage cost of about $0.098.
Subtracting a $0.10 brokerage cost from the estimated $1.80 gross gain shows a net gain to 2019 of $1.70 X 102 shares = $173.40 or about a 17% net on our $999.60 investment.
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