Analysts Just Updated These 3 Healthcare REITs
A new year often brings new hope to the stock market, and after the dismal performance of Real Estate Investment Trusts (REITs) in 2022, it’s good to see analysts posting improved forecasts for the very same REITs that were so heavily downgraded last year.
Healthcare is one area of the overall market that is often described as recession-resistant, and with fears of a 2023 recession sweeping the market, some analysts are turning their attention to the sector in a positive light.
Take a look at three healthcare REITs that have received analytics updates over the past month, have performed quite well since the start of the year, and could be poised for significant improvement in 2023:
Welltower Inc. (NYSE: WELL) is a health care REIT based in Toledo, Ohio that owns 1,687 nursing home, critical care, and outpatient care facilities in the US, Canada, and the UK.
In November, Welltower announced that it had initiated a master lease with Integra Health of 147 skilled nursing facilities, which Integra Health would sublease to 15 regional operators.
On Jan. 9, Raymond James analyst Jonathan Hughes upgraded Welltower from Outperform to Strong Buy, while raising his price target from $72 to $82. Compared to the latest closing price of $72.10, this represents a potential increase of 13.7%.
The quarterly dividend is $0.61 per share, or $2.44 per year, giving a 3.3% yield. Welltower has risen in price by 7.69% since the beginning of the New Year.
Healthpeak Properties Inc. (NYSE: PEAK) is a Denver-headquartered REIT that owns and operates private fee-based facilities such as life science centers, medical offices, and nursing homes. The company was included in the S&P 500 in 2008.
Healthpeak Properties owns 464 properties in Colorado, Tennessee and California, valued at over $20 billion. Many of Healthpeak Properties’ life sciences tenants are large, well-known pharmaceutical companies such as Amgen Inc, Pfizer Incand Bristol Myers Squibb Co..
Healthpeak Properties pays an annual dividend of $1.20 per share, which is 4.3%. Its operating fund payout ratio (FFO) is a comfortable 69%.
The FFO in the third quarter of $0.43 was 19.4% higher than the FFO of $0.36 achieved in the third quarter of 2021. Revenue of $520.41 million was up 8.1% compared to the third quarter of 2021.
On January 3, Jefferies analyst Jonathan Petersen upgraded Healthpeak Properties from Hold to Buy. He also raised his price target significantly from $23 to $29. With the latest closing price of $27.32, this represents a potential profit of 6.1%.
In 2022, Healthpeak Properties had a negative total return of over 27%, but the stock is up 7.39% since January 1st.
Realty Trust Doctors (NYSE: DOC) owns and operates a diverse group of 290 healthcare facilities in 32 states. Most of them are medical offices rented out to doctors.
On December 14, an analyst at Keybanc Capital Markets Inc. Todd Thomas upgraded Physicians Realty Trust rating from sector weight to overweight. He announced a price target of $17. With a recent closing price of $15.24, this means an 11.5% upside potential.
On December 22, Physicians Realty Trust announced that its Board of Trustees declared a quarterly dividend of $0.23 per share, the 38th consecutive quarterly dividend.
In its third quarter operating results, Physicians Realty Trust reported revenue of $131.5 million, up 14.1% from the third quarter of 2021, and normalized cash from operations of $0.26 USA, which corresponds to the results of the third quarter of 2021. the sale of three properties in Great Falls, Montana for $116.3 million generated a net gain of $53.9 million.
Trust in Physicians Realty grew by 7.28% in 2023.
Keep in mind that despite these updates, analysts are not always right and investors should do their own research before buying any stock.
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