Primary Health Properties PLC (LSE:PHP, OTC:PHPRF) continues to deliver steady earnings growth, reckons broker Stifel.
Last year represented the 28th consecutive year that the property group has increased its dividend, which remains covered by recurring earnings.
Investment ambitions have been scaled back to reflect that primary healthcare rents have yet to rise to reflect the higher funding costs faced by all REITs, said the broker.
As such, Stifel predicted that earnings growth will be lower than in previous years, but still positive, with rental income derived from the sub-sector with the highest quality tenant covenant in the sector.
Furthermore, earnings growth is protected by a debt book that is 97% fixed or hedged over an average of seven years.
“We highlight the very high dividend yield of 7.7%, amongst the highest in the UK REIT sector,” said Stifel.
'Hold' is the broker’s recommendation.