HCP Boasts Of 29 Years Of Dividend Increases


HCP ( HCP ) is a real estate investment trust that invests in four health-care sectors: senior housing; post-acute/skilled nursing facilities; life sciences; and medical offices and hospitals.

The company manages, acquires, develops and sells properties, seeking geographic and sector diversity. Some of its operating partners include big players such asHCA ( HCA ),Pfizer ( PFE ),Amgen ( AMGN ), Genentech,Tenet Healthcare ( THC ) andBrookdale Senior Living (BKD).

HCP says that it has $22 billion in assets under management, spread across 1,154 properties. Although it has a presence in most states, the Irvine, Calif.-based REIT is heavily invested in California, Texas and Florida.

It generates $1.7 billion in annual net operating income and interest income.

The company says that it has generated an annual shareholder return of 15.5% since its 1985 IPO and has grown its dividend for 29 straight years.

Its heaviest concentration is in senior housing, which accounts for 38% of its assets under management. Brookdale is its biggest partner and is now bigger, thanks to a recent merger. Skilled nursing facilities make up 29% of revenue, and hospitals account for only 3%.

Growth has been steady, if unspectacular. Funds from operation (FFO), the REIT equivalent of earnings, have been up for four straight years. Analysts expect 1% growth this year and 4% next.

In the most recent quarter, FFO rose 4%, while revenue grew 5%. The company's 2013 pretax margins were an impressive 41%.

On Tuesday, HCP paid a 54.5-cent quarterly dividend to shareholders of record Aug. 11. That rate represents an annual yield of 5.2%.

The annual dividend growth rate is 4%.

The stock hit an all-time high of 56.06 on May 22, 2013. It now trades in the low 40s. It's built a narrow consolidation that goes back to early May this year. The pattern has varied from high to low by little more than 6%.

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

This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: HCP , HCA , PFE , AMGN , THC

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