With HCP (NYSE:HCP)sporting a 4.5% yield, and Health Care REIT (NYSE:WELL)not far behind at 3.8%, it is not surprising these companies are best know for being big dividend payers. But what should really grab your attention is how these two companies have managed to generate steadily growing earnings year after year, allowing them to consistently increase their dividends for the past 25 years. 

HCP Dividend Chart

Note: Including special dividend, Health Care REIT's dividend did not fall in 2007 despite how it appears in the chart above. 

How have they been so consistent? One word: diversity.

Diverse income streams
According to Health Care REIT, the population of Americans 75 and older is growing five times as fast as the total population. Considering that both companies own predominantly senior housing and assisted-living facilities, this metric creates huge opportunities for growth. 

However, where there is excitement, there is often overbuilding. If more senior housing is built than there is demand for, the increase in competition will force occupancy rates, rent, and profits downward. That's why it's essential for HCP and Health Care REIT to own a diverse portfolio of properties. 

Because different property types, even ones in the same industry, can perform differently in varying environments -- by owning hospitals, medical office buildings, and life science buildings, as well as senior housing -- it helps protect HCP and Health Care REIT from having one struggling property type sink the ship. 

Diverse geographically
While the U.S. unemployment rate currently sits at 5.9%, it's greater than 7% in California, Georgia, and Oregon. Dig a little deeper, and in central and northern California it's greater than 10%. 

Although we tend to think of the health care industry as recession proof, subsectors such as senior housing aren't immune to economic woes. According to aPlaceforMom, the average cost for senior housing can range from $1,500 to $3,500 a month, and those costs are even higher for assisted-living facilities. Even during good times those figures aren't cheap, and they can easily become unmanageable during or following recessions.  

If HCP or Health Care REIT's tenants -- the companies that run their senior housing communities -- struggle to attract and maintain residents because of a weak economy, they may not be able to pay their rent. Considering that rent is HCP and Health Care REIT's chief source of income, that could cause some serious headaches.

But both companies have an answer. HCP and Health Care REIT focus their investments in areas with strong demographics -- a large and growing population of those 65 and older -- such as California, Texas, and Florida. Moreover, each company owns over 1,000 properties that span the entire U.S., parts of the the U.K., and, for Health Care REIT, Canada -- and this vast geographic diversity limits their exposure to regional, or even more widespread, downturns that could seriously affect their overall operations. 

Diverse by operator
HCP and Health Care REIT manage real estate, which is what they do best. For running each individual senior housing community or assisted-living facility, however, they need high-quality tenants with experience operating these types of properties.

Here's where things get tricky: Having only a couple of types of operators, or tenants, leaves HCP and Health Care REIT vulnerable to having a significantly negative impact on their business from the loss of one tenant. On the other hand, building strong relationships with operators enhances growth opportunities. For instance, during Health Care REIT's third-quarter conference call, the company's chief investment officer, Scott Brinker, noted that its existing operators "helped us generate more than $750 million of new investments last quarter." 

I believe HCP and Health Care REIT have found a happy medium for this conundrum. Both companies generate about half of their revenue through four or five operators. The rest is diversified among dozens of other companies, and that diversification prevents either company from being overly exposed to just a few tenants, while also allowing them to build strong relationships that will drive HCP and Health Care REIT's growth for decades to come. 

What are you waiting for?
If you want to capture a big dividend yield from companies in a rapidly growing industry, HCP and Health Care REIT's diverse portfolio of property types, locations, and operators will help keep their business stable and their earnings consistent over time. I think both companies are rock-solid income investments and great buys today.