This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Universal Health's Sweet REIT

Universal, which declined the opportunity to comment for this story, saw its stock drop $1.35 Friday to $57.76. UHT, which surged on last month's dividend increase, added 48 cents to $34.48. Both stocks have outperformed the broader market over the past year.

Close Ties

Universal formally established UHT in 1986. At that time, the company named only one person -- besides its own chairman -- as a UHT director. That person, Daniel Cain, currently fails to qualify as an independent director because he pocketed a $200,000 "finder's fee" from a transaction involving UHT in 2003. However, UHT lists its remaining four directors, added in more recent years, as independent.

Still, UHT counts little else as its own. Miller chairs and runs both Universal and UHT. Universal Controller Charles Boyle doubles as CFO of the REIT. Cheryl Ramagano serves as treasurer of both companies. And Bruce Gilbert is the sole general counsel for Universal and UHT.

Indeed, UHT's proxy states that all of the REIT's officers work for Universal as well. And Universal itself has acknowledged the power it wields over UHT as a result.

"We conduct the trust's day-to-day affairs, provide administrative services and present investment opportunities," Universal disclosed in its latest annual report. Thus, "management believes that it has the ability to exercise significant influence over the trust."

For Universal, at least, that arrangement has so far worked out quite well.

Untapped Value

Tsoupros, one of only two analysts who regularly follow UHT, has offered specific details.

In the beginning, he wrote, Universal leased virtually all of UHT's real estate. Even today, he noted, Universal still leases plenty.

For example, he said, Universal leases five of UHT's seven hospitals. Moreover, he said, the minimum rent generated by those hospitals totals just $11.5 million even though true market rates would bring in an estimated $46.6 million.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
VTR $62.95 0.00%
UHS $142.71 0.00%
UHT $47.12 0.00%
AAPL $126.44 0.00%
FB $87.28 0.00%

Markets

DOW 17,730.11 -27.80 -0.16%
S&P 500 2,076.78 -0.64 -0.03%
NASDAQ 5,009.2140 -3.9090 -0.08%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs