Why Health Care REIT (HCN) Stock Is Slipping In After-Hours Trading Today

NEW YORK (TheStreet) -- Shares of Health Care REIT, Inc.  (HCN) are slipping, down 3.5% to $64.16 in after-hours trading today, following the company's announcement that it filed to sell 15.5 million shares of its common stock.

Net proceeds from this offering will be used to repay advances under its primary credit facility as well as for general corporate expenses, like investing in health care and senior housing properties.

Goldman Sachs Group  (GS) and RBC Capital Markets are acting as joint book-running managers for the offering.

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Also, Health Care REIT announced today that it has signed a letter of intent and anticipates acquiring approximately $1.7 billion of properties in the second half of 2014.

Separately, TheStreet Ratings team rates HEALTH CARE REIT INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate HEALTH CARE REIT INC (HCN) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels, good cash flow from operations, increase in net income and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 10.6%. Since the same quarter one year prior, revenues rose by 21.1%. Growth in the company's revenue appears to have helped boost the 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 989.5% when compared to the same quarter one year prior, rising from $8.09 million to $88.18 million.
  • Net operating cash flow has significantly increased by 62.79% to $336.87 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 17.00%.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • You can view the full analysis from the report here: HCN Ratings Report

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