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Health Care REIT Update For 12-13-13

When does the effect of tax loss selling and window dressing end? I suspect it ends BEFORE year end - but on what date, I do not know. With the sector average yield on my stats (which are not capitalization weighted) over 6.00% - this appears to be a good entry point. On the other hand, the talking heads on CNBC have me persuaded that the yield on the 10 year treasury is headed for 3.00% before there is a pause. And REITs will have a knee-jerk reaction to those rising rates.

Health Care Update for Q4-13

Yields are calculated on Q4-13 dividends. HCN has preannounced a February increase in the dividend to $0.795/share - a 4% increase. MPW has announced an increase to $0.21/share for the dividend to be paid in January 2014. The Dividend/FFO ratio uses the 2014 FFO projection. AVIV started trading on 3-21-13 and DOC on 7-19-13. The change in the FFO projection for those two are for the last 90 days. The change is price is from their second day of trading. The sector average LTM (last twelve month) dividend change omits AVIV and DOC from that calculation. VTR has atypically had two dividend increases in the LTM.

 

 


  Share Price 2013 FFO Estimate   Div/ Percent Change LTM
Company_name_and_ticker 1-01 12-13 1-01 12-13 Yield FFO Price Pr+Div 13 FFO Target Div

Aviv REIT (NYSE:AVIV) 22.55 23.84 1.30 1.25 6.04 77.84 5.72 8.91 -3.85 0.00 0.00
Physicians Realty (NYSE:DOC) 11.50 11.56 0.54 0.27 7.79 91.84 0.52 2.48 -50.00 0.00 0.00
Health Care REIT (HCN) 61.29 53.91 3.91 3.79 5.68 76.12 -12.04 -7.05 -3.07 6.23 3.38
Health Care Prop (NYSE:HCP) 45.16 35.77 2.97 2.99 5.87 68.63 -20.79 -16.14 0.67 -3.85 5.00
Health Care Realty (NYSE:HR) 24.01 21.09 1.39 1.30 5.69 84.51 -12.16 -7.16 -6.47 -2.28 0.00
Health Care Trust (NYSE:HTA) 9.90 9.90 0.66 0.64 5.81 83.33 0.00 5.81 -3.03 2.93 0.00
LTC Property (NYSE:LTC) 35.19 36.16 2.43 2.35 5.64 76.98 2.76 7.60 -3.29 19.24 9.68
Med Prop Trust (NYSE:MPW) 11.96 12.02 1.07 0.99 6.99 75.00 0.50 7.19 -7.48 1.69 5.00
Nat'l Health Inv (NYSE:NHI) 56.53 57.04 3.39 3.53 5.15 71.19 0.90 6.10 4.13 12.86 9.70
Omega Health (NYSE:OHI) 23.85 30.19 2.24 2.51 6.36 70.85 26.58 34.47 12.05 35.42 9.09
Sabra Health Care (NASDAQ:SBRA) 21.72 25.71 1.72 1.87 5.29 63.26 18.37 24.63 8.72 30.51 3.03
Senior Housing (NASDAQ:SNH) 23.64 22.02 1.84 1.70 7.08 89.14 -6.85 -0.25 -7.61 2.52 0.00
Universal Health (NYSE:UHT) 50.61 41.60 3.01 2.73 6.01 89.29 -17.80 -14.10 -9.30 0.00 0.81
Ventas (NYSE:VTR) 64.72 55.98 3.99 4.13 5.18 66.51 -13.50 -10.40 3.51 2.73 16.94

Average           6.04 77.46 -1.99 3.09 -4.64 7.71 5.22

Dividend dates are:

AVIV: 1-17-14 DOC: 11-01-13 HCN: 11-19-13 HCP: 11-18-13 HR : 11-29-13 HTA: 01-02-14 LTC: monthly
MPW: 01-07-14 NHI: 11-07-13 OHI: 11-15-13 SBRA: 11-28-13 SNH: 11-20-13 UHT: 09-30-13 VTR: 12-31-13

Historical yields for the sector:

Mar 2007: 5.33% June: 6.24% Sept: 5.90% Dec: 5.77%
Mar 2008: 5.84% June: 6.33% Sept: 5.25% Dec: 6.89%
Mar 2009: 9.11% June: 7.88% Sept: 6.67% Dec: 6.31%
Mar 2010: 6.67% June: 6.09% Sept: 5.62% Dec: 5.75%
Mar 2011: 5.48% June: 5.64% Sept: 6.02% Dec: 5.34%
Mar 2012: 5.16% June: 4.84% Sept: 4.89% Dec: 4.69%
Mar 2013: 4.66% June: 5.09% Sept: 5.49% Dec:
Health Care Price/FFO Ratios 12-13

The analyst projected FFO stats for UTH that I find at Yahoo Finance look bad to me. Those projections are not in line with what UHT is reporting. This date uses a 2013 FFO projection that is a run rate based on current trends. HTA IPOed in June of 2012. 'Normalized FFO' stats for the pre-IPO years came from its 2011 10-K. When AVIV and DOC were added to the sector on 11-19-13, the sector average 2013 price/FFO ratio rose from 14.94 to 15.79 and the 2014 ratio fell from 13.90 to 13.80. 2012 FFO growth was 10.77% and 2013 growth was 7.65%.

 

 


  FFO / Share % FFO Growth Price/FFO 14 FFO Range
Co. 2009 2010 2011 2012 2013 2014 11-12 12-13 13-14 2012 2013 2014 High Low Range

AVIV 0.00 0.00 0.00 0.00 1.25 1.85     48.00 na 19.07 12.89 190 176 7.57%
DOC 0.00 0.00 0.00 0.00 0.27 0.98     262.96 na 42.81 11.80 84 21 64.29%
HCN 3.12 3.13 3.41 3.51 3.79 4.02 2.93 7.98 6.07 15.36 14.22 13.41 413 390 5.72%
HCP 2.14 2.19 2.69 2.76 2.99 3.06 2.60 8.33 2.34 12.96 11.96 11.69 317 297 6.54%
HR 1.65 1.29 1.15 1.31 1.30 1.42 13.91 -0.76 9.23 16.10 16.22 14.85 147 135 8.45%
HTA 0.00 0.38 0.51 0.61 0.64 0.69 19.61 4.92 7.81 16.23 15.47 14.35 73 64 13.04%
LTC 1.89 1.88 2.15 2.26 2.35 2.65 5.12 3.98 12.77 16.00 15.39 13.65 270 258 4.53%
MPW 0.79 0.66 0.71 0.90 0.99 1.12 26.76 10.00 13.13 13.36 12.14 10.73 114 110 3.57%
NHI 2.33 2.76 2.88 3.18 3.53 4.13 10.42 11.01 17.00 17.94 16.16 13.81 390 366 5.81%
OHI 1.47 1.61 1.89 2.19 2.51 2.71 15.87 14.61 7.97 13.79 12.03 11.14 276 259 6.27%
SBRA 0.00 0.00 1.31 1.41 1.87 2.15 7.63 32.62 14.97 18.23 13.75 11.96 237 178 27.44%
SNH 1.69 1.70 1.73 1.75 1.70 1.75 1.16 -2.86 2.94 12.58 12.95 12.58 183 167 9.14%
UHT 2.80 2.61 2.57 2.84 2.73 2.80 10.51 -3.87 2.56 14.65 15.24 14.86 280 280 0.00%
VTR 2.66 2.85 3.37 3.80 4.13 4.36 12.76 8.68 5.57 14.73 13.55 12.84 445 421 5.50%

Average             -43.34 12.11 15.16 16.50 12.90

Historical Price/FFO ratios for the sector:

Mar 2007: 15.23 June: 13.19 Sept: 14.18 Dec: 14.55
Mar 2008: 14.17 June: 13.27 Sept: 15.95 Dec: 12.38
Mar 2009: 9.42 June: 10.84 Sept: 12.61 Dec: 13.90
Mar 2010: 12.61 June: 14.10 Sept: 15.45 Dec: 15.41
Mar 2011: 15.07 June: 14.62 Sept: 12.91 Dec: 14.95
Mar 2012: 14.21 June: 15.25 Sept: 15.05 Dec: 15.82
Mar 2013: 17.18 June: 15.84 Sept: 15.21 Dec:

note: the addition of AVIV and DOC to this added messes with the significance of the large jump in sector average price/FFO ratios for December 2013.

Yield + CAGR Total Return Expectations

 

 


Company Q4-13 My Total Bonds My Total Rtn Consensus Pr Impl Div
    Yield CAGR Return Ratings RRRs - RRR Ratings CAGR / FAD

Aviv REIT AVIV 6.04% 5.00% 11.04% NR 10.70 0.34 2.8 4.66 83.72
Physicians Realty DOC 7.79% 3.20% 10.99% NR 10.20 0.79 1.5 2.41 97.83
Health Care REIT HCN 5.68% 4.10% 9.78% BBB 9.00 0.78 2.7 3.32 92.17
Health Care Prop HCP 5.87% 4.10% 9.97% BBB+ 9.20 0.77 2.8 3.33 83.67
Health Care Realty HR 5.69% 1.50% 7.19% BBB- 8.20 -1.01 3.0 2.51 90.23
Health Care Trust HTA 5.81% 3.00% 8.81% BBB- 8.00 0.81 2.4 2.19 99.14
LTC Property LTC 5.64% 4.40% 10.04% NR 9.70 0.34 2.9 4.06 89.47
Med Prop Trust MPW 6.99% 4.50% 11.49% BB 10.60 0.89 3.0 3.61 90.32
Nat'l Health Inv NHI 5.15% 5.00% 10.15% NR 9.80 0.35 3.1 4.65 82.82
Omega Health OHI 6.36% 4.50% 10.86% BBB- 10.50 0.36 2.8 4.14 85.33
Sabra Health Care SBRA 5.29% 5.00% 10.29% BB- 10.00 0.29 1.9 4.71 77.27
Senior Housing SNH 7.08% 2.00% 9.08% BBB- 8.70 0.38 3.2 1.62 99.36
Universal Health UHT 6.01% 3.00% 9.01% NR 9.00 0.01 3.0 2.99 90.91
Ventas VTR 5.18% 6.20% 11.38% BBB 9.50 1.88 2.8 4.32 73.23

Average   6.04% 3.96% 10.01%       2.71

Disclosure: I am long LTC, OHI, VTR.