Last update on 2024-06-06

Healthpeak Properties (PEAK) - Piotroski F-Score Analysis for Year 2023 (Final Score: 6/9)

Learn about Healthpeak Properties' (PEAK) Piotroski F-Score analysis for 2023. Discover a detailed financial position assessment. Score: 6/9. Read more now!

Short Analysis - Piotroski Score: 6

We're running Healthpeak Properties (PEAK) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

We're examining Healthpeak Properties (PEAK) using the Piotroski F-Score to determine its financial health. The company scores 6 out of 9, indicating a relatively strong position. 1. Profitability: Healthpeak scored well with positive net income and solid cash flow from operations, but it did see a drop in Return on Assets (ROA). 2. Liquidity: The increased current ratio is a good sign, even if it's still below industry median. However, the rise in leverage is a point of concern. 3. Efficiency: Positive trends in Operating Cash Flow compared to Net Income and an increase in Asset Turnover Ratio, though Gross Margin improvements are minimal. 4. Share dilution: Increased shares outstanding is a negative point. Overall, Healthpeak shows a mix of strengths, particularly in liquidity and cash flow, but faces challenges in profitability and increased leverage.

Insights for Value Investors Seeking Stable Income

Healthpeak Properties (PEAK) appears to be a stable investment with notable strengths in liquidity and cash flow. However, the drop in ROA, high leverage, and share dilution are concerning. It is worth considering for investment, especially for those who prioritize liquidity and cash flow. Proceed with caution and monitor how the company manages its leverage and profitability in the future.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Healthpeak Properties (PEAK)

Company has a positive net income?

Net income indicates whether the company is profitable. A positive net income adds 1 point.

The net income of Healthpeak Properties (PEAK) in 2023 is $306,009,000, which is positive. This indicates the company is profitable, resulting in 1 point added. Over the past 20 years, the company saw fluctuations in net income, with occasional losses, notably in 2015. Recently, the trend appears positive, affirming financial health.

Company has a positive cash flow?

Cash Flow from Operations (CFO) represents the amount of cash a company generates from its regular business operations, which is considered a sign of financial health.

Healthpeak Properties (PEAK) recorded a positive Cash Flow from Operations (CFO) of $956,242,000 in 2023. This continues a trend of positive CFO over the past two decades, reflecting consistent operational efficiency. Over the last 20 years, the company has managed to maintain a positive CFO each year, peaking at $1,248,621,000 in 2014. Given this performance, Healthpeak remains a resilient player in terms of cash generation, merit this criterion with a full 1 point.

Return on Assets (ROA) are growing?

Compare the ROA of a company over two consecutive years to determine improvement in profitability.

In the case of Healthpeak Properties (PEAK), the Return on Assets (ROA) decreased from 0.0323 in 2022 to 0.0194 in 2023, signaling a drop in profitability. This mandates a score of 0 according to Piotroski criteria. Interestingly, Healthpeak's performance over the last 20 years shows significant variations in operating cash flow, and its ROA has generally trailed behind the industry median. While the broader market consistently saw a median ROA above 0.65, Healthpeak's figures for 2023 were markedly lower, indicating potential inefficiencies or challenges unique to the firm.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income indicates that the company is generating sufficient cash from its core business operations compared to its net earnings. This suggests strong cash flow management and operational efficiency.

For the year 2023, Healthpeak Properties (PEAK) reported an Operating Cash Flow of $956,242,000 and a Net Income of $306,009,000. Since the Operating Cash Flow is substantially higher than the Net Income, we can add 1 point for this criterion. This trend indicates a positive sign of financial health and operational efficiency for Healthpeak Properties. Historically, this indicates consistent operational efficiency over the years as the Operating Cash Flow has often been higher than Net Income, further demonstrating the company's robust capability to generate cash flow from its core business operations.

Liquidity of Healthpeak Properties (PEAK)

Leverage is declining?

Analyzing changes in leverage is crucial to understanding a company's financial stability, as increased leverage can indicate heightened risk.

The leverage of Healthpeak Properties has increased from 0.3621 in 2022 to 0.4053 in 2023. This upward trend suggests that the company is taking on more debt relative to its equity, which could indicate higher financial risk. Historically, leverage levels were at their highest in the mid-2010s, peaking at 0.5831 in 2016, and then gradually decreasing until 2020. However, the current increase from 2022 to 2023 indicates the company might be financing growth or operations through debt, which might not be favorable if not managed properly. Thus, for the Piotroski analysis, this criterion scores 0 points as leverage has increased.

Current Ratio is growing?

The current ratio is a liquidity ratio that measures a company's ability to cover its short-term obligations with its current assets.

In 2022, Healthpeak Properties (PEAK) had a current ratio of 0.3414. By 2023, this ratio increased to 0.4073. This increment indicates improved liquidity and an enhanced ability to meet short-term obligations, earning the company 1 point according to Piotroski criteria. Notably, even though the company's current ratio has increased, it remains below the industry median of 1.0418 for 2023.

Number of shares not diluted?

The change in shares outstanding indicates whether a company is issuing more shares, which can dilute existing shareholders' equity and potentially impact the stock price.

From 2022 to 2023, Healthpeak Properties' outstanding shares increased from 538,809,000 to 547,006,000. This indicates an issuance of additional 8,197,000 shares over the period. Historically, the company has consistently increased its number of shares over the last 20 years, from 252,260,000 in 2003 to its current level. The increase in shares outstanding can be seen as a negative signal as it dilutes the value for existing shareholders and hence doesn't contribute any positive points to the Piotroski score. Consequently, the score for this criterion remains 0.

Operating of Healthpeak Properties (PEAK)

Cross Margin is growing?

Evaluating a company's change in Gross Margin between years helps determine its efficiency in generating profits from its revenue. An increase is positive.

For Healthpeak Properties (PEAK), the Gross Margin has marginally increased from 0.5813 in 2022 to 0.5864 in 2023. This uptick, though small, indicates a slight enhancement in operational efficiency and profitability. Over the last 20 years, Healthpeak’s Gross Margin has fluctuated, peaking at 0.9033 in 2003 and hitting lows in the more recent decade. Notably, the recent value is still lower than the industry's median Gross Margin of 0.6985 in 2023. While the increase in 2023 earns a point in the Piotroski analysis, it also highlights the need for further improvement to match industry standards.

Asset Turnover Ratio is growing?

Current year's Asset Turnover ratio compared to the previous year determines efficiency improvements in utilizing assets.

Healthpeak Properties' Asset Turnover has increased from 0.1329 in 2022 to 0.1386 in 2023. This increment reflects a positive trend in the company’s efficiency in generating revenue from its assets. Historically, an increase in the Asset Turnover ratio, as seen in the last two decades, generally hints at improved management operations and asset utilization. The 0.1386 ratio marks a near peak compared to the last 20 years, reflecting steady growth since 2018 when the asset turnover was 0.1378. Given this positive performance, Healthpeak Properties earns 1 point in this Piotroski criterion.