Health Care REIT Prices Offering - Analyst Blog
February 22 2012 - 1:08PM
Zacks
Health Care REIT, Inc. (HCN) recently announced
that it has priced its underwritten public offering of 18 million
shares at $53.50 per share with the total amount estimated at $963
million. In a bid to cover over-allotments, the company will
provide a 30-day option to the underwriters for purchasing an
additional 2.7 million shares.
HCN intends to utilize the proceeds generated from the
transaction to repayadvances under its unsecured lines of credit,
to repay other outstanding debts and for other general corporate
purposes, including investing in health care and seniors housing
properties.
This public offering will enable the company to attain financial
flexibility and seize investment opportunities and acquisitions,
which go a long way in enhancing top-line growth. As of December
31, 2011, HCN’s cash position stood at $163.5 million.
Health Care REIT reported fourth quarter 2011 FFO (funds from
operations) of $154.4 million or 83 cents per share, compared with
$85.1 million or 61 cents in the year-earlier quarter. Funds from
operations, a widely used metric to gauge the performance of REITs,
is obtained after adding depreciation and amortization and other
non-cash expenses to net income.
HCN is a real estate investment trust (REIT) that invests across
the full spectrum of senior housing and health care real estate
properties. Headquartered in Toledo, Ohio, Health Care REIT also
provides an extensive array of property management and development
services.
Health Care usually has long-term triple-net leases in senior
housing and healthcare real estate properties that insulates it
from market volatility and provides a steady source of revenue
despite a challenging macroeconomic environment.
Health Care currently retains a Zacks #2 Rank, which translates
into a short-term Buy rating. We are also maintaining our long-term
Neutral recommendation on the stock. One of its competitors,
HCP Inc. (HCP), currently has a Zacks #3 Rank,
which translates into a short-term Hold rating.
HEALTH CR REIT (HCN): Free Stock Analysis Report
HCP INC (HCP): Free Stock Analysis Report
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