NHI Stock: Dividend vs Normalized FFO After the NHC Sale

The $0.94 dividend against NAREIT FFO, Normalized FFO and FAD

NHI reports three cash-flow measures beside GAAP net income: NAREIT FFO, Normalized FFO (NAREIT FFO excluding items the company calls infrequent or unpredictable) and Normalized FAD (Funds Available for Distribution). The release says Normalized FAD “serves as an indicator of the Company’s ability to distribute dividends to its stockholders each period,” and warns that its measures “may not be comparable to similarly titled measures used by other REITs.” Unlike Omega Healthcare, which leads with AFFO, NHI’s headline cash-flow lines are Normalized FFO per share and Normalized FAD in dollars.

Net income is not a cover figure this quarter: the $1.15 per diluted share in Q2 2026 included $22.0 million of gains on property sales, and Q3 2026 will include a gain of about $541.6 million on the NHC sale.

Full years, from the fourth-quarter release and the 10-Qs:

NAREIT FFO for 2025 included $12.4 million of non-cash write-offs of straight-line rents receivable tied to early lease terminations, which is why it sits $0.26 below Normalized FFO for the year ($4.65 against $4.91). The dividend was $0.90 a quarter from the declaration of November 3, 2023 through May 2, 2025, rose to $0.92 in August 2025 and to $0.94 in August 2026. Using the $3.7 billion market value and 49,115,748 shares in the 10-Q (a rounded figure, about $75 a share, our arithmetic), $3.76 a year would be a yield of roughly 5.0%; the price on the day you read this will differ.

What the NHC sale takes out, and what it brings in

NHC is a long-standing tenant, a stockholder (1,630,642 NHI shares at December 31, 2025, per NHC’s public filings as quoted in NHI’s 8-K) and, until May 2026, NHC’s board chair also sat on NHI’s board. The 1991 master lease covered 32 skilled nursing facilities and three independent living facilities in Alabama, Florida, Kentucky, Missouri, South Carolina, Tennessee and Virginia. NHI’s 8-K says a Special Committee of non-interested directors “unanimously approved the Transaction.”

The size of what left, in NHI’s own numbers: NHC properties produced $9.7 million of rental income in Q2 2025 and $10.2 million in Q2 2026, and NHC revenues were $40.3 million, 10.7% of total revenues, in 2025 (11.9% in 2024). Q2 2026 total rental income was $71.4 million, so NHC was roughly 14% of the quarter’s rent (our arithmetic). The carrying value is tiny because the properties were acquired in 1991, which is also why the gain is so large and why the gain, being excluded from FFO, does not help the dividend.

Two periods are worth keeping apart. Q2 2026 FFO of $1.19 still includes the NHC rent. Guidance after the sale puts the second half at $1.16-$1.185 a quarter (our arithmetic), which assumes the proceeds are put to work: $334.5 million was in restricted cash on July 31 for a Section 1031 exchange, the company has signed letters of intent for about $127.3 million of investments at an average initial NOI yield of about 6.8%, and it is evaluating a pipeline of about $420 million. If those do not close, the $0.21 a quarter that NHC rent represented is replaced only by lower interest cost on repaid debt.

The tenants that remain: Senior Living Communities and Bickford

With NHC gone, NHI’s largest triple-net tenants are Senior Living Communities and Bickford. The 10-Q gives revenue shares and operating data for both.

Bickford’s four master leases were amended in April 2026 to a combined annual base rent of $38.4 million with 2.0%-3.0% annual escalators, plus contingent rent on revenues above a base amount. In the same month two Bickford loans were extended by three years: a $14.7 million construction loan at 9.0% to July 2029 and an $11.5 million mortgage note at 10.0% to April 2029. The mortgage note is not recognized on NHI’s balance sheet. Cash-basis tenants (two, Bickford and one other) paid $12.4 million in Q2 2026. A cash-basis tenant is one whose rent is recorded only when received; it does not mean the tenant has stopped paying. Credit loss reserves on notes were $15.3 million at June 30, 2026.

Geography adds a second concentration: South Carolina produced $20.6 million of H1 2026 NOI out of $169.0 million (about 12%, our arithmetic), the largest state, ahead of Texas, Florida, North Carolina and Tennessee.

SHOP: the part that changes with occupancy

SHOP is the segment where NHI owns the operating business and hires managers, so its income moves with occupancy and costs rather than with a fixed lease. At June 30, 2026 it held 42 properties with 4,001 units and a gross carrying amount of $854.8 million, 11.8% of H1 NOI. The CEO’s release says “Our total SHOP NOI for the second quarter increased by approximately 188% year-over-year,” and that invested capital in SHOP in the quarter was $854.8 million.

Almost all of the growth is acquired or transitioned property, not existing property. Same Store occupancy has fallen every quarter in the 10-Q table, from 89.1% in Q2 2025 through 87.9%, 86.4% and 85.8% to 85.1%. Guidance assumes Same Store SHOP NOI growth of 1%-3% for the year.

Debt and leverage

The revolver is 34% of principal (our arithmetic), so a third of the debt floats. The $125.0 million bank term loan was repaid at maturity in June 2026. Net debt to adjusted EBITDA was 3.6x at September 30, 2025, 3.8x at December 31, 4.0x at March 31, 2026 and 4.1x at June 30, against a target range the company lowered to 3.5x-4.5x (it was 4.0x-5.0x in the Q3 2025 release). The fixed charge coverage ratio was 5.2x for H1 2026. Fitch revised its outlook to Positive on June 29, 2026 (BBB-); the 10-Q shows Moody’s at Baa3 (Stable) and S&P at BBB- (Stable), both last reaffirmed in the autumn of 2025.

The balance sheet in the quarter-end tables is before the sale proceeds. By July 31, 2026 the 10-Q reports $502.0 million of revolver availability, $51.2 million of cash and $334.5 million of restricted cash tied to the 1031 exchange.

Share count and the ATM program

NHI had 48,392,384 shares outstanding on February 20, 2026 and 49,110,434 on August 3, 2026, 1.5% more (our arithmetic). It issued shares through its at-the-market program (net proceeds of $181.5 million in 2025 and $142.4 million in 2024) and settled the last $44.9 million of forward sales in Q2 2026. The new program allows up to $500.0 million of sales, all of it available at June 30, 2026. Whether NHI sells stock again depends on how it prices acquisitions against its own share price; its filings do not commit either way.

How it compares with non-traded healthcare vehicles

NHI is a listed, investment-grade REIT with a $0.94 dividend that moves only when its board decides. Our other pages on healthcare real estate show different setups: Welltower and Ventas are larger senior-housing REITs, Omega is the skilled-nursing counterpart with many operators on a cash basis, and American Healthcare REIT is a former non-traded REIT that listed. Our page on National Healthcare Properties is a different company: a non-traded REIT that listed, with no connection to NHI or to NHC. A listed share can be sold on any trading day at a price that moves; a non-traded REIT repurchases under rules its board controls (listed vs non-traded).

What changed in the latest quarter, and what comes next

• The dividend. Raised $0.02 to $0.94 on August 7, 2026, after $0.92 in the previous four declarations.
• The tenant base. NHC is out as a tenant on July 1, 2026; the 10-Q has no tenant above 10% of revenues other than Senior Living at 12.0%.
• Guidance. Cut by $0.20 at both ends of the range at Q1 2026 results (May 4, 2026) and left at $4.74-$4.79 on August 10.
• Management. The Q2 release records a CFO transition ($1.1 million of compensation costs in Q2 Normalized FFO), the appointment of a Chief Operating Officer, and, on August 27, 2026, a change-in-control severance agreement with one executive.
• What is not filed. The 10-Q and earnings release for the quarter ended September 30, 2026. NHI filed its Q3 2025 10-Q on November 6, 2025; we have found no announced date for 2026. The next dividend cheque, the $0.94, is payable November 6, 2026.

What a holder can do with this

• Pick the line that answers your question. For the company’s own cover measure use Normalized FFO ($1.19 in Q2, 79% at $0.94). For a cash view use Normalized FAD in dollars ($124.1 million in H1 against $89.0 million of dividends paid, 72%).
• Read Q2 and Q3 separately. Q2 includes NHC rent. The first full quarter without it is Q3 2026, and its 10-Q will also show the gain on sale, the reinvestment of the 1031 cash and where the revolver stands.
• Track four facts each quarter. Same Store SHOP occupancy (85.1%), the Bickford cash-basis payments and coverage (1.54x pro forma), Senior Living’s share of revenue (12.0%), and net debt to adjusted EBITDA (4.1x before the sale).
• Know what kind of income it is. NHI’s dividends are REIT dividends whose tax character is reported after year-end; our pages on return of capital and Section 199A explain the boxes on Form 1099-DIV.
• Check what else you own. Broad REIT funds may hold NHI, so you may own it indirectly (REIT ETF holdings).

This is analysis of public documents, not investment, legal or tax advice.

FAQ

Sources, read on October 19, 2026: National Health Investors, Inc. (CIK 877860) Form 10-K for 2025 (accession 0000877860-26-000053, filed February 26, 2026); Forms 10-Q for the quarters ended September 30, 2025 (0000877860-25-000183, filed November 6, 2025) and June 30, 2026 (0000877860-26-000199, filed August 10, 2026); earnings-release Forms 8-K (Exhibit 99.1) of November 6, 2025 (0000877860-25-000185), February 26, 2026 (0000877860-26-000054), May 4, 2026 (0000877860-26-000136) and August 10, 2026 (0000877860-26-000200); Forms 8-K of April 21, 2026 (0000877860-26-000106), June 1, 2026 (0000877860-26-000152) and July 1, 2026 (0000877860-26-000169). Payout percentages, sums, the per-share NHC rent, implied second-half guidance, the revolver drawn at July 31, share count growth and the approximate yield are our arithmetic. This is analysis of public documents, not investment, legal or tax advice.