Health Care REIT, Inc. (HCN), a real estate investment trust (REIT) that operates senior housing and health care real estate assets, has recently announced gross investments of $702.5 million in the third quarter of fiscal 2010. Year to date, gross investments of the company totaled approximately $1.6 billion.
Health Care REIT had earlier targeted $2.0 billion of gross investments in fiscal 2010. With the current investments, management believes that the company is well on course to exceed the target.
Health Care REIT invests across the full spectrum of senior housing and healthcare real estate properties. Headquartered in Toledo, Ohio, the company also provides an extensive array of property management and development services.
Founded in 1970, the company was the first REIT to invest exclusively in healthcare facilities. Health Care REIT provides senior housing operators and healthcare systems with a single source for facility planning, design and turn-key development, property management and monetization or expansion of existing real estate.
Health Care REIT has established quite a track record of conservative capital management and cash returns to shareholders in the form of steady dividend and has paid uninterrupted dividends for 157 quarters in its 39-year history.
However, deep cuts in Medicare have been proposed over the next five years by reducing or freezing payments to skilled nursing facilities, hospitals, and other healthcare providers. With a large portion of revenues being determined by government payout rates, forces beyond the company’s control could negatively affect revenues and operator coverage ratios. Consequently, we maintain our Neutral rating on Health Care REIT, which currently has a Zacks #3 Rank that indicates a short-term ‘Hold’ rating.
HEALTH CR REIT (HCN): Free Stock Analysis Report
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