Health Care REIT HCP At New High, Dividend Yield 4.1%


Shutterstock photo

HCP Inc. ( HCP ), a health care real estate investment trust, has offered steady capital gains since the financial crisis. And it's increased its dividend for 28 straight years.

HCP invests in a broad range of properties, but derives most of its revenue from senior housing, medical offices and life science facilities. As a REIT, HCP must pay out at least 90% of its income to shareholders each year in return for favorable tax treatment.

HCP is the only REIT in the S&P 500 Dividend Aristocrats index, which is comprised of companies that have increased their annual dividend for at least 25 years.

The Long Beach, Calif.-based company in January raised its quarterly cash payout to 52.5 cents per share, up 5% from the previous rate of 50 cents. That brings the annual dividend to $2.10 a share, good for a yield of about 4% at the current share price. By contrast, the S&P 500's average dividend yield was about 2.5%.

Meanwhile, HCP's stock has more than tripled since bottoming out during the 2008-09 financial crisis. It's risen 15% this year, hitting a new high Tuesday and topping the S&P 500's approximately 10% year-to-date gain. HCP is more than 5% beyond a 47.45 buy point in a saucer-with-handle base .

The company is due to report first-quarter financial results before the market opens April 30. Analysts expect profit for the quarter rose 9% from a year earlier to 73 cents a share. Revenue is expected to have risen 12% to $514.6 million. Both figures, if realized, would mark the second straight quarter of accelerating earnings and revenue growth.

The company's outlook could change, however, if the government cuts Medicare and Medicaid payments as part of efforts to reduce the nation's debt.

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: Personal Finance , Investing Ideas

More from Investor's Business Daily


Investor's Business Daily

Investor's Business Daily

Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by