Morningstar Rating

Stock Research and Analysis

by Todd Lukasik, CFA

Bulls Say

Health Care REIT invests across property type, leasing model, and investment type, any combination of which may be more or less attractive throughout a commercial real estate cycle.
Incremental investment with existing partners fuels growth, providing more than half of its investments over the past three years.
Favorable industry tailwinds, including a growing and aging population and regulatory changes that are set to expand the pool of potential participants in the health-care system, should drive incremental demand for health-care real estate and fuel inflation-plus growth. Read more 

Bears Say

Health Care REIT's dividend has only grown at a roughly 2.5% average annual rate over the past 10 years, despite a near tenfold increase in its property investments.
If market rents fail to increase at the inflation-plus escalation rates generally embedded in Health Care REIT's leases, tenants will push for lower rents upon lease expiration.
Health-care reform may result in increased operating variability and uncertainty and pressure to contain costs--including rent--across the health-care system. Read more 

Management

We give Health Care REIT a standard stewardship rating.
Over the years, Health Care REIT's strategy has served shareholders well. In the 21 years through 2013, HCN has delivered total shareholder returns averaging 15.5% annually, well ahead of the   Read more 

Profile

Health Care REIT, formed in 1970, focuses exclusively on health-care properties. The firm owns a variety of senior housing facilities, skilled nursing/post-acute facilities,  Read more 

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2 Structures, 2 Picks in Health-Care REITs 
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