雅虎香港財經 Welltower (WELL) Raises 2024 FFO Guidance, Hikes Dividend by 10%
Welltower Inc. WELL recently raised its normalized funds from operations (FFO) per share guidance for 2024. It also announced an increase in its quarterly dividend.
Welltower raised its expectations for 2024 normalized FFO per share to $4.05 - $4.17 from $4.02 -$4.15 stated earlier. The Zacks Consensus Estimate for the same is currently pegged at $4.11 per share, well within the guided range.
According to its business update, In the Seniors Housing Operating (”SHO”) portfolio, its seniors housing fundamentals remain healthy as the company enters into peak leasing season. Notably, the non-same store properties have shown remarkable strength, with recently transitioned assets generating stronger than anticipated results.
The company announced that its board of directors approved a quarterly dividend of 67 cents per share, reflecting a 10% rise from the prior quarter. The increase is backed by Welltower’s solid financial performance, low payout ratio owing to outsized levels of cash flow growth, and the Board’s confidence in the company’s strong growth prospects going forward.
Restructuring initiatives have enabled the company to attract top-class operators, enabling it to improve the quality of its cash flows. Per the update, WELL reached an agreement with Atria Senior Living to transition 89 Holiday by Atria communities to six of Welltower’s existing operating partners, including Arrow, Cogir US, Discovery, QSL, Sagora and StoryPoint.
These operators have strong operating acumen and deep expertise in their respective regions. As of Jun 3, 2024, 27 of the 89 properties have transitioned, with the remaining 62 properties expected to transition in the third quarter of 2024.
Additionally, WELL’s accretive capital deployment activity has been driving growth across its portfolio. Per the update, since Apr 29, 2024, it entered into agreements to close in excess of $1 billion of investments, in addition to the previously announced $2.8 billion closed or under contract.
WELL also noted that its capital deployment opportunities continue expanding, with deal flow accelerating across all regions, property types, and up and down the capital stack.
On May 22, 2024, S&P Global revised Welltower’s credit rating outlook to positive from stable. This revision was based on the strong tailwinds in the seniors housing industry, a materially strengthened balance sheet and an expectation of continuous improvement in key credit metrics in the future.
Welltower is poised to benefit from its diversified portfolio of healthcare real estate assets in the key markets of the United States, Canada and the United Kingdom. An aging population and an expected rise in senior citizens’ healthcare expenditure are likely to aid the SHO portfolio’s growth. The outpatient medical segment is expected to benefit from favorable outpatient visit trends.
However, competition in the senior housing market raises concerns. High interest rates add to the company’s woes.
Over the past three months, shares of this Zacks Rank #3 (Hold) company have gained 13.7% against the industry’s decline of 4.2%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the broader REIT sector are Rexford Industrial Realty REXR and Peakstone Realty Trust PKST, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for REXR’s 2024 FFO per share is pegged at $2.34, which suggests year-over-year growth of 6.85%.
The Zacks Consensus Estimate for PKST’s full-year FFO per share stands at $3.28, which indicates an increase of 9.7% from the year-ago period.
Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.
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