Shareholders in Income Investor selection Health Care REIT
For its third quarter, Health Care REIT reported FFO per diluted share of $0.73, versus $0.77 last year. At the business level, things aren't as bad as they seem. Revenues increased 16.7%, and despite higher debt levels and interest expense, FFO increased 9.3%. But as shareholders, we look at the per-share results, and because of shares issued in the past year to fund expansion and debt payments, FFO per share actually declined slightly.
Since the stock price has hardly budged following yesterday's earnings announcement, it seems that investors are looking toward Health Care REIT's future -- for which the company appears well-positioned. Health Care REIT has invested ahead of time for the baby boomers' arrival in nursing care. In addition, the acquisition of WindroseMedical Properties Trust
The original arguments for a long-term investment in Health Care REIT were its cleaned-up balance sheet and ideal positioning to capitalize on the coming long-term care and nursing needs of baby boomers. Companies such as Ventas
I'd argue that the growth prospects and the diversification from Windrose are positives, but the acquisition also means that the company must manage yet another property type. Still, the price Health Care REIT is paying for Windrose, and the performance I've seen in Washington REIT's
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