Annaly Capital Management, Inc. (NLY), American Capital Agency Corp. (AGNC), HCP, Inc. (HCP): This ‘Baby Boomer’ Stock Is A Dividend Machine

In its recent $1.7 billion deal, HCP, Inc. (NYSE:HCP) added 129 properties to its senior housing community portfolio. These properties offer initial lease terms of 14 to 16 years, with the option to extend leases at higher rents for up to 30 to 35 years.

Long-term, steady-income generating deals like these are HCP’s specialty. Disciplined acquisition, along with a consistent ability to create shareholder value, makes HCP’s management team hard to beat.

Since CEO Jay Flaherty took the helm in 2002, HCP has returned an average of 16% a year to shareholders through dividends and capital gains. That compares with an annual average gain of 6% in the S&P 500 in that time.

Best of all, after the recent market pullback, shares have been selling at a discount. HCP, Inc. (NYSE:HCP) shares dropped 23% between May 21 and June 20.

Yet after poring over the latest company transcripts and financial statements, I haven’t been able to find any red flags that would justify such a steep decline. Nor could I find sufficient evidence to support the idea that, relative to its peers, HCP, Inc. (NYSE:HCP) was simply an overvalued stock that was due for a correction.

HCP is thriving and should continue to do so for years to come. Owning and renting properties in the health care sector is one of the safest and most stable business models in the REIT universe.

When quality companies like HCP, Inc. (NYSE:HCP) experience irrational price drops, it’s a good time for savvy investors to shop for bargains.

Risks to Consider: Changes in governmental health care regulation are always a potential concern in the health care sector. Should programs such as Medicare and Medicaid undergo significant revisions, it could have a negative impact on tenants’ ability to pay rent or to afford rent increases.

Action to Take –> HCP is a great investment at today’s prices for long-term, dividend-oriented investors.

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