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Health Care REIT Raises Profit Outlook

By: Investor's Business Daily
Posted: 8/4/2014 6:35:00 PM
Referenced Stocks: HCN

With a portfolio of more than 1,000 properties,Health Care REIT ( HCN ) counts on a large and steady stream of revenue.

The real estate investment trust invests in senior housing and health care buildings, from long-term care facilities to medical office buildings and even life science labs.

The company earns the bulk of its revenue from lease rents, but it also works with its partners in managing the properties to develop growth opportunities.

On Friday, Health Care REIT reported second-quarter results that topped expectations. Funds from operations (the standard earnings benchmark for REITs) rose 14% to $1.06 a share. Revenue climbed 22% to $826.45 million.

Management raised its full-year guidance, saying it expects normalized FFO of $4.05 to $4.15 from a previous forecast of $4.03 to $4.13. The increase, the company said, was partly due to the company's strong Q2 operating results and investment activity.

Toledo, Ohio-based Health Care REIT owns properties in the U.S., Canada and U.K.

The company has been raising its dividend about once a year.

In January, it set a quarterly dividend of 79.5 cents a share, from 76.5 cents. That works out to an annualized yield of nearly 5%.

In April, the company named Thomas DeRosa, a former vice chairman and chief financial officer of Rouse Co., as its new chief executive.

DeRosa, who had been on Health Care's board, replaced George Chapman, who retired as chairman, CEO and president. He stayed on as a senior adviser.

The stock has been consolidating for more than a year. A shallow pattern within the larger correction has a potential buy point at 65.35.

The stock's current 35%-deep correction is the deepest since the 2008-09 financial crisis.