Healthcare Realty Rolls Out $500M Share Repurchase – Buyback Wednesdays

Key Insights:

• Healthcare Realty is the largest pure play Medical Office Buildings (MOB) REIT in the United States.
• The company’s properties are on or adjacent to hospital campuses. Dallas, Seattle, Houston, Los Angeles, and Atlanta are its top 5 markets.
• The REIT has a forward dividend yield of 6.6% and is well-covered by a 75% payout ratio.

Healthcare Realty Trust (HR) is a real estate investment trust that integrates owning, managing, financing and developing real estate properties associated primarily with outpatient healthcare services throughout the United States. From an initial portfolio of 21 healthcare facilities in 1993, HR now owns 715 properties totaling more than 40 million square feet. Its portfolio mostly includes multi-tenant, on-campus medical office buildings. Dallas, Seattle, and Los Angeles are its three largest markets with a combined 20.2% of its medical office building portfolio.

Source: Investor Presentation -HR

On June 1, 2023, HR announced a $500 million share repurchase program which represents around 7% of its market cap at announcement. The company does not intend to use debt to fund the share repurchase program. Just before the announcement, on May 30, the stock price dropped to $18.33/ share, close to its lowest price in the last five years. The company has a lot of debt (6.6x adjusted EBITDA) but would prefer to have the option to buyback stock in case the stock gets significantly cheaper.

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