9% dividend yield! Could these ftse 250 shares buy a massive passive income?

With the Bank of England reduction rates, savers are likely to obtain a weaker performance of their cash. But there is a Ftse 250 The stock that I think seems interesting right now.

The stock is Sure (LSE: AGR) – A real estate investment trust (Reit) that leases a portfolio of health buildings. Its rent is 81% financed by the Government and there is a 9% dividend on offer.

Keep in mind that tax treatment depends on the individual circumstances of each client and may be subject to changes in the future. The content in this article is provided only for information purposes. It is not intended to be, it does not constitute any form of fiscal advice.

Reliable income

Assura has 625 properties, including GP surgeries, primary care centers and outpatient clinics. More than 99% of the portfolio is currently occupied and the average lease has more than 10 years.

With the vast majority of its rent from the NHS or HSE, the threat of a non -minimal breach is minimal. And the company will benefit from a general trend towards people living longer.

Debt can often be a problem for Reit, but Assura is in a reasonable position. Its average debt cost is around 3%, which is not bad with interest rates currently at 4.25%.

While some of his debts mature in less than five years, the loans that mature first are those that have the highest rates. In other words, it has long -term debt at relatively low costs.

In other words, Assura seems to be in a decent way. It operates in an industry that must be quite resistant, it has tenants that it is unlikely that they are not breached and its balance does not seem a concern.

A 9% dividend yield can often be a signal for investors of what there is something to worry about. It is not immediately obvious what that could be in this case, but a closer aspect is more revealing.

Actions count

With any company, investors must monitor the amount of shares in circulation over time. In particular, they should pay attention to whether this is going up or down.

On equal terms, a counting of increasing actions decreases the value of each action. As the business is divided between a greater number of actions, the amount that each shareholder has is reduced.

Assura's account count has increased considerably in recent years. Since 2019, the number of actions in circulation has grown by about 4.5% per year.

That means that investors have had to increase their investment by 4.5% each year to maintain their property in the general company. And that really reduces the return of the dividend.

If this continues, investors will not be able to simply raise a 9%passive income yield. They will reinvest around half to stop their participation in the reduction of the business.

This is actually a symptom of a broader risk with Assura. Its dividend policy means that it often has to increase capital through debt or heritage, so there is a real risk that the count of shares will continue to increase.

A great passive income opportunity?

An action with a 9% dividend yield often comes with a capture. And I think this is the case with Assura: while the company distributes a lot of effective, a good amount must be reinvested to avoid dilution.

That is not necessarily a devastating problem. But it is something that investors are realistic when they think of passive income opportunities.