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Health Care REIT 1st Quarter Results May 9, 2014

Posted by shaferfinancial in Finance.
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HCN has been one of my core holdings for 15 years now. I have done very well with it over the years. However, I am growing increasingly less enamored with owning it because the dividend increases are averaging only 3% over the last 8 years. Their latest quarter was another good one.

Normalized FFO was up 10% to $1.00 over the year before. FAD is also up 10% to $.90. Same store NOI increased 4.4% from the year before. It’s senior housing portfolio was up over 8%. Senior Housing is still recovering from the recession and is just now kicking along on all cylinders. They keep partnering with quality companies as per their strategy. $542M was invested this last quarter. As a result they raised year long outlook range up 3%.

Dividends were declared at $.795 for the quarter up 4% from last year. Net debt to unappreciated book value was 43%. If you are looking for a conservatively run company that is giving around 5% in dividend yield that appreciated 3-4% per year this is a great stock. However, for me, I will continue to look for opportunity to sell parts of my holdings and find higher dividend companies that increase at a higher rate. I hope they will increase the dividend more than 4% over the next few years as I will continue to hold some HCN for that time period. But I wonder what another downturn in the economy will do to this stock.

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