Health Care REIT Inc.
), a real estate investment trust (REIT), reported first-quarter
2014 normalized funds from operations (FFO) of $1.00 per share, 2
cents ahead of the Zacks Consensus Estimate and up 9 cents year
The 10% year-over-year increase in normalized FFO per share is
primarily driven by same-store net operating income (NOI) growth
and notable portfolio investments in premium assets. Based on these
factors, the company has increased its 2014 outlook.
Moreover, normalized funds available for distribution (FAD)
stood at 90 cents per share, up from 81 cents per share in the
Total revenue escalated 27.3% year over year to $801.8 million
and marginally exceeded the Zacks Consensus Estimate of $801
Inside the Headlines
In the first quarter, same-store NOI increased 4.4% from the
year-ago period, driven by 8.1% year-over-year rise in the seniors
housing operating portfolio.
Health Care REIT concluded gross investments worth $542 million
in the quarter under review. This included a joint venture
investment worth $386 million, $64 million in development financing
and $57 million of acquisitions.
Early in the second quarter, Health Care REIT completed the
recapitalization of the Sunrise Senior Living management company,
upon which, the company now owns 24% interest in Sunrise Senior
Living while Revera holds the rest.
Health Care REIT exited the first quarter with cash and cash
equivalents of $185.9 million, up from $158.8 million as of Dec 31,
2014 Outlook Raised
Health Care REIT increased its normalized FFO per share guidance
range to $4.03 - $4.13, from $3.93 - $4.03 guided earlier. The new
outlook is higher than the Zacks Consensus Estimate of $4.02.
Also, the company raised its normalized FAD per share outlook
range to $3.55 - $3.65, from the previous range of $3.53 -
The board of directors at Health Care REIT declared a quarterly
cash dividend of 79.5 cents per share, marking a rise of 4% over
the year-ago dividend of 76.5 cents. This marked the company's 172
consecutive quarterly dividend payment. It will be paid on May 20,
2014, to stockholders of record as of May 12.
We are encouraged with the strong results at Health Care REIT,
on the back of notable operating portfolio performance. The
investments in high-quality properties are expected to further
enhance the company's portfolio and extend its reach in the
high-barriers-to-entry affluent markets. Also, the guidance
increase boosts shareholders confidence in the stock.
Health Care REIT currently carries a Zacks Rank #3 (Hold).
Investors interested in the REIT industry may consider stocks like
Duke Realty Corporation
Cousins Properties Incorporated
SL Green Realty Corp.
). All stocks carry a Zacks Rank #2 (Buy).
1. FFO, a widely accepted and reported measure of the
performance of REITs, is derived by adding depreciation,
amortization and other non-cash expenses to net income.
2. FAD, a measure to ascertain the ability of REITs to
generate cash, is derived by subtracting straight-line rent and
non-recurring real estate expenses from funds from
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
COUSIN PROP INC (CUZ): Free Stock Analysis
DUKE REALTY CP (DRE): Free Stock Analysis
HEALTH CR REIT (HCN): Free Stock Analysis
SL GREEN REALTY (SLG): Free Stock Analysis
To read this article on Zacks.com click here.