Can HCP Continue Its Growth Ride Post CCRC Deal? - Analyst Blog


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Recently, HCP Inc. ( HCP ) extended its relationship with Brookdale Senior Living ( BKD ) by creating a $1.2 billion continuing care retirement communities (CCRC) joint venture (JV) and amending previous Emeritus leases.

The CCRC partnership with Brookdale offers a solid platform for expansion with favorable dynamics in senior housing and good occupancy prospects.

Moreover, on Aug 5, HCP came up with second-quarter 2014 adjusted FFO (funds from operations) per share of 75 cents, in line with the Zacks Consensus Estimate and up 4.2% from the year-ago quarter, thanks to a rise in revenues. The company also raised its full-year outlook.

With an increase in the elderly population and consequent proliferation in healthcare expenses, demand for healthcare facilities and senior housing has been on the rise. Given its well-balanced, diversified portfolio and decent balance sheet, not to mention the strategic acquisitions and tie-ups, HCP remains well poised to capitalize on the promising prospects in this industry.

However, cut-throat competition, dependence on governmental healthcare programs for a number of its tenants and operators and an expected increase in interest rate remain matters of concern.

Echoing similar sentiments, the Zacks Consensus Estimate over the last 30 days remained unchanged at $3.02 per share for 2014, while for 2015 the consensus inched up 0.3% to $3.14 per share. HCP currently carries a Zacks Rank #3 (Hold).

To gain a deeper insight into HCP, you can refer to our updated research report issued on Sep 3, 2014.

Other Stocks to Consider

Investors interested in the REIT industry may consider better-ranked stocks like Omega Healthcare Investors Inc. ( OHI ) and Gladstone Commercial Corp. ( GOOD ). Both these stocks have a Zacks Rank #2 (Buy).

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HCP INC (HCP): Free Stock Analysis Report

BROOKDALE SENR (BKD): Free Stock Analysis Report

GLADSTONE COMML (GOOD): Free Stock Analysis Report

OMEGA HLTHCARE (OHI): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
More Headlines for: HCP , BKD , GOOD , OHI

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