For my first purchase today I bought shares of HCP, Inc. (HCP), a large and diversified healthcare REIT. I provided some information about HCP in an article on Seeking Alpha when I started my position in August. The continued decline in the stock price (HCP now has a P/FFO below 13) motivated me to average down by increasing my position.
I bought 40 shares of HCP at the price of $37.68 per share plus commission, giving me a 5.55% yield on cost and reducing my cost basis by over 2% to below $40 per share. At the current dividend rate, I can expect to receive quarterly dividends of $21.00 from this purchase, which will add a total of $84.00 to my annual dividend income. This purchase was made in my Roth IRA using rollover money. I now have a total of 115 shares of HCP and I will receive combined quarterly dividends of $60.38. My forward 12-month dividend total increases to $3,366.
I am concerned abt adding more funds to HCP at this point. I intrigued why the CEO got fired? Are you not?ReplyDelete
Anonymous: I think people are overreacting to the CEO getting fired. Granted, it was a surprise and the company has been opaque about the reasons, but the Board of Directors must have had good reasons for their action. I am not overly concerned because I recognize that the company is not run solely by its CEO. The Board of Directors and upper-level management play key roles in all major decisions, so I find it unlikely that the company will suffer from the absence of a single person. It will take a while to know that for sure, but the latest earnings call suggested that everything was fine from an operational standpoint.Delete
Looks like a solid purchase here. HCP has gotten hammered lately. It looks like there was concern about management, but I don't really see anything worrisome. Admittedly, I've never taken a real deep look at HCP. It is on my radar, however. The valuation and yield makes sense here, and further exposure to a wonderful healthcare trend is intriguing.
DM: HCP has certainly been hammered, even though it continues to put up solid operating results. As with any REIT nowadays, there is some risk, but I think HCP represents a pretty good long-term investment, especially with demographic trends in healthcare.Delete
I'm interested in adding to HCP here to help lower my cost basis and subsequently increase my yield. I still like the long-term story with HCP and the diversified nature of their properties is excellent. I'll probably hold off for the time being though until I can see a bit more about what the new CEO has in store.ReplyDelete
PIP: I think the long-term story for HCP remains intact and they'll likely do just fine under the new CEO. They recently raised their guidance for 2014 and I look forward to seeing what kind of dividend increase they give shareholders in a couple of months.Delete