Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, compelling growth in net income and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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Highlights from the ratings report include:
- HCN's very impressive revenue growth greatly exceeded the industry average of 12.0%. Since the same quarter one year prior, revenues leaped by 51.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 22.5% when compared to the same quarter one year prior, going from $58.51 million to $71.66 million.
- Net operating cash flow has increased to $199.81 million or 14.80% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -20.78%.
- Compared to its closing price of one year ago, HCN's share price has jumped by 39.83%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- HEALTH CARE REIT INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HEALTH CARE REIT INC increased its bottom line by earning $0.45 versus $0.34 in the prior year. This year, the market expects an improvement in earnings ($1.14 versus $0.45).
Health Care REIT, Inc. is an independent equity real estate investment trust. The firm engages in acquiring, planning, developing, managing, repositioning and monetizing of real estate assets. It primarily invests in the real estate markets of the United States. Health Care REIT has a market cap of $20.2 billion and is part of the financial sector and real estate industry. The company has a P/E ratio of 106.00, above the S&P 500 P/E ratio of 18.00. Shares are up 21.3% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.
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