Linked here is a detailed quantitative analysis of HCP, Inc. (HCP, Financial). Below are some highlights from the above linked analysis:
Company Description: Health Care Property Investors, Inc. is a California-based equity-oriented real estate investment trust that has direct or joint venture investments in health care-related facilities across the U.S.
Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value along with these four calculations of fair value, see page 2 of the linked PDF for a detailed description:
1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number
HCP is trading at a discount to only 3.) above. The stock is trading at a 9.7% discount to its calculated fair value of $49.04. HCP earned a Star in this section since it is trading at a fair value.
Dividend Analytical Data: In this section there are three possible Stars and three key metrics, see page 2 of the linked PDF for a detailed description:
1. Free Cash Flow Payout
2. Debt To Total Capital
3. Key Metrics
4. Dividend Growth Rate
5. Years of Div. Growth
6. Rolling 4-yr Div. > 15%
HCP earned one Star in this section for 3.) above. HCP earned a Star for having an acceptable score in at least two of the four Key Metrics measured. The company has paid a cash dividend to shareholders every year since 1985 and has increased its dividend payments for 29 consecutive years.
Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA) or Treasury bond? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description:
1. NPV MMA Diff.
2. Years to > MMA
HCP earned a Star in this section for its NPV MMA Diff. of the $1,100. This amount is in excess of the $600 target I look for in a stock that has increased dividends as long as HCP has. The stock's current yield of 4.92% exceeds the 2.98% estimated 20-year average MMA rate.
Memberships and Peers: HCP is a member of the S&P 500, a Dividend Aristocrat, a member of the Broad Dividend Achievers
