Health Care REIT Inc.
) achieved a new 52-week high of $76.42 in the early hours of the
trading session on May 14. The closing price of this real estate
investment trust (REIT) was $76.00, reflecting a solid
year-to-date return of 27.2%. The average trading volume of the
session was over 2.18 million shares.
However, considering the estimate revision trends over the
last 30 days, we believe that this upside is not likely in the
near term for this Zacks Ranks #3 (Hold) stock.
Factors to Consider
Better-than-expected first-quarter 2013 results - including an
earnings surprise of 1.11% and consistent overall portfolio
performance - as well as successful completion of the Sunrise
Senior Living facility acquisition were the key growth drivers
for Health Care REIT.
Moreover, the healthcare sector is relatively immune to the
downturn in the economy, and provides a steady source of income
that insulates the company from short-term market volatility.
Hence, with decent fundamentals, the stock has an expected
year-over-year FFO (funds from operations) growth of 7.41% for
2013. However, a large portion of its revenues originate from a
few tenants, which exposes it to concentration risks, and partly
undermines its growth potential.
On May 7, Health Care REIT reported first-quarter 2013
normalized FFO of 91 cents per share, a cent ahead of the Zacks
Consensus Estimate and up 4 cents year over year. The increase in
year-over-year FFO per share was primarily attributable to
better-than-expected revenue growth. The company also registered
decent same-store NOI growth and asset value appreciation.
Notably, Health Care REIT has delivered positive earnings
surprises in the last 4 consecutive quarters with an average beat
Over the last 30 days, the Zacks Consensus Estimate for
full-year 2013 FFO per share moved down 0.5% to $3.78. On the
other hand, for 2014 FFO, the Zacks Consensus Estimate moved up
1.0% to $4.05 per share.
Apart from Health Care REIT, other companies in the REIT
sector that hit 52-week highs on the same day include
Liberty Property Trust
Taubman Centers, Inc.
Note: Funds from operations, a widely accepted and reported
measure of REITs performance, are derived by adding
depreciation, amortization and other non-cash expenses to net
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