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Healthcare Trust Of America, Inc. (HTA): Insiders Buying A High Yielding Health Care REIT That Should Benefit From Obamacare

 December 12, 2012 12:33 PM


(By Rich Bieglmeier) Like it or not, fortunes are going to be made from the Affordable Health Care Act (AHCA) a.k.a Obamacare. It's a classic case of money in motion, billions of dollars changing hands, and for some, it will be like winning the lottery. Investors who lock onto the right stocks can get a piece of the action, too.

iStock stumbled upon Healthcare Trust of America, Inc. (HTA) in our weekly review of insider buys. Healthcare Trust is a real estate investment trust (REIT) that primarily focuses on medical office buildings, healthcare-related facilities, and quality commercial office properties.

Last week, four insiders bought a combined 60,000 HTA shares for a total investment of $601,000. We especially like it when the upper brass, those running the day-to-day operations open their checkbooks. CEO Scott Peters picked up 10,000 shares while CFO Kellie Pruitt added 5,000.

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Recently, Peters sat down with Jim Cramer and told the TV "stock sage," "with 30 to 40 million more insured coming up, you need a most affordable location to off those services. those are mlbs (medical buildings on location), they're on campus, and Jim, I think over the next 10, 20 years there will be core critical real estate. most of them are in crowded fields."

Cramer finished Peter's thought, mentioning that it's a $250 billion industry. To which the CEO replied, "It's a great opportunity for us to be selective, [be] disciplined, buy great assets, long-term value with great yields for our investors." As it stands now, the REIT offers a dividend yield of 5.90%.

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Many expect solid performance from the group in 2013. The Street.com believes, "Medical Offices Should Become Most Favored Asset Sector in 2013." According to Forbes contributor, Brad Thomas, health care REITs raked in the 2nd largest haul of money from investors in 2012 with $10.57 billion.

Thomas and Cramer both share the belief that HTA could hold up well if the economy suffers due to cannonballing off of the fiscal cliff. Health care REITs are considered defensive because a bad economy doesn't stop people from needing medical attention. In all likelihood, many will need more if the economy sours.

With more than 30 million people expected to be added to the insured during 2013, demand for medical office space will increase; however, Wall Street thinks earnings for HTA will only rise to 66 cents in 2013 from 61 cents in 2012; meanwhile, revenues are tagged for 5.90%.

iStock believes the consensus could prove to be light as the company plans on leasing vacant space in medical office buildings, as well as rent increases. It shouldn't be too hard due to the limited supply of medical office space, increased demand thanks to the AHCA and the reluctance of medical office building tenants to move or relocate because it is good for business to stay close to nationally or regionally affiliated healthcare systems.

Overall, iStock doesn't see Healthcare Trust of America, Inc. (HTA) as a stock that will burn up the charts price-wise. Rather, it could be right for investors looking for a steady performer that's likely to increase its dividend payout as Obamacare is implemented.

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