On the four Ms, Healthpeak Properties earns 29 for management and 42 for moat. The management score rests on a return on invested capital of 37.3% and a gross margin of 22.5% — figures that describe capital earning less than it costs to employ. Debt sits at 1.39x equity. The moderate moat and weak management are not the same judgement, and the gap between them is where the argument about this business sits.
Three independent anchors set the price worth paying. Growth is modelled at 11.4% a year, the rate measured from the filings. The exit multiple assumed is 22.8x. That produces an intrinsic value of $5.81, a 10-CAP price of $8.36 and a payback time price of $11.21, with the value zone set at the highest of the three, $11.21. Today's price of $19.44 is 73% above it.
The price is above the value zone and the business scores 42 for moat and 29 for management. Neither test argues for paying up here.
| Price | $19.44 |
| Market cap | $13.4B |
| P/E ratio | 55.5x |
| Return on invested capital | 37.3% |
| Gross margin | 22.5% |
| Debt to equity | 1.39x |
| Free cash flow yield | 11.2% |
| Growth rate used | 11.4% |
| Growth rate measured | 11.0% |
| Exit multiple assumed | 22.8x |
| Company | Moat | Buy price |
| Mid-America Apartment Communities (MAA) | 25 | $62.40 |
| Regency Centers (REG) | 44 | $39.12 |
| Jones Lang LaSalle (JLL) | 81 | $333.15 |
| W. P. Carey Inc. (WPC) | 32 | $56.68 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Healthpeak Properties rather than accepting ours.