Headquartered in Long Beach, CA, HCP, Inc. (HCP) is a self-administered real estate investment trust (REIT), which invests in and leases directly or through joint venture healthcare facilities in 43 states. In September 2007, the company changed its name from Health Care Property Investors, Inc. to HCP, Inc.

HCP continues to raise cash through asset sales, equity issuance, and debt to pay down the bridge loan from the $3 billion Slough Estates purchase. The company has done a successful job of de-levering and strengthening the balance sheet. With full capacity on its $1.5 line of credit, the company has adequate capital to address 2009 debt maturities.

We continue our Buy rating. HCP has a diversified asset base and is moving toward more private pay sources, which we view as a positive. The yield is near 8% and currently being covered at the FFO [funds from operations] level.

We think healthcare will continue to outperform other REIT sectors going into 2009. Healthcare REITs should hold up better in a recession than companies in other sectors. Consumers will continue to spend on healthcare while cutting out other non-essential services.

Read the full analyst report on HCP

“HCP” Free Stock Analysis: Buy? Sell? Hold?
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