Healthy REIT: What's Up DOC?

08/24/2015 7:00 am EST


Chris Versace

Editor, PowerTrend Bulletin, Growth & Dividend Report, and PowerTrader

This featured recommendation REIT has a strategy to acquire and develop properties that are leased to physicians, hospitals, and healthcare delivery systems, explains Chris Versace, editor of Growth & Dividend Report.

Physicians Realty Trust (DOC) reported a disappointing quarter and missed funds from operations (FFO) expectations in the process.

The company reported FFO per share of $0.21 vs. the expected consensus of $0.24 per share. These days, even missing estimates by a penny per share is cause for execution in some people’s minds. That was the bad news.

The good news was the company has identified a new executive vice president who also will assume the chief investment officer (CIO) role that eventually will be vacated by the company’s founder John Sweeney.

I’ve had some concerns about this situation several weeks back, since personnel changes can be tricky times for a company’s business and their shares.

The incoming executive vice president and eventual CIO is Deeni Taylor, who has more than 25 years of hospital executive management experience.

Physicians Realty Trust also announced that, based on the strong visibility with its pipeline, it was increasing its acquisition guidance by $200 million this year to $700-$900 million.

With more than 95% occupancy rates across its $1.3 billion portfolio, the company is targeting growth over the coming quarters with its acquisition plan.

Looking at demographics and the aging of the population, we know that during the short-, medium-, and longer-term that demand for healthcare services will explode.

In the short run, DOC shares are likely to be range-bound by Fed rate hike concerns. But to patient investors like us, that means clipping coupons as the company expands its footprint. At current levels, DOC shares with their 5.9% dividend yield are firmly in the buy zone.

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