Health Care REIT Inc. (
touched a new 52-week high of $71.76 on Monday, Apr 15, 2013, as
it gained momentum following an upgrade of the company's rating
by Standard & Poor's Ratings Services. The closing price of
this healthcare real estate investment trust (REIT) on Apr 15,
2013 was $70.31, representing asolid year-to-date return of
16.4%. The average trading volume over the last 3 months was 1.91
Factors Driving Momentum
On Apr 4, Health Care REIT received a rating upgrade from
Standard & Poor's Ratings Services. Consequently, the company
now enjoys a corporate credit rating to BBB from BBB- with a
stable outlook. The rating upgrade came on the back of Health
Care REIT's diversified and quality portfolio. Moreover, the
rating agency acknowledged the company's capacity to produce a
stable cash flow as well as improve its credit metrics. This
plays a major role in preserving investor confidence in the stock
and helps boost its creditworthiness in the market.
Being one of the largest and oldest healthcare REITs in the
U.S., the company boasts a strong portfolio of senior housing,
long-term care and medical office facilities. Moreover, the
completion of the acquisition of Sunrise Senior Living facility
during the fourth quarter of 2012 boosted the company's
high-quality senior housing portfolio and extended its reach in
the high-barriers-to-entry affluent markets.
However, Health Care REIT's fourth-quarter results were not
very encouraging. On Feb 25, the company reported fourth-quarter
results with normalized FFO (funds from operations) of 85 cents
per share, in line with the Zacks Consensus Estimate. However,
this was lower than the year-ago FFO of 91 cents. The decrease in
year-over-year FFO per share was primarily attributable to
increased number of outstanding shares in the reported quarter.
For full-year 2012, the company's normalized FFO came in at $3.52
per share, exceeding the Zacks Consensus Estimate by 3 cents and
was significantly ahead of the year-ago figure of $3.41.
Health Care REIT is scheduled to report its first-quarter 2013
earnings on May 7. The company currently carries a Zacks Rank #4
(Sell) and has an earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) of 0.00%. Thus we are not sure about an earnings beat when it
reports its first-quarter results.
Over the last 30 days, the Zacks Consensus Estimate for
full-year 2013 has remained unchanged at $3.81 per share. On the
other hand, the Zacks Consensus Estimate for full-year 2014 has
marginally moved down to $4.02 per share.
Of late, a number of REITs crafted 52-week highs. They include
DCT Industrial Trust Inc. (
Federal Realty Investment Trust (
CBRE Group 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
CBRE GROUP INC (CBG): Free Stock Analysis
DCT INDUSTRIAL (DCT): Free Stock Analysis
FED RLTY INV (FRT): Free Stock Analysis
HEALTH CR REIT (HCN): Free Stock Analysis
To read this article on Zacks.com click here.