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Welltower's (HCN) Q2 FFO, Revenues Beat Estimates; Up Y/Y
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Welltower Inc. , a healthcare real estate investment trust (“REIT”), came up with normalized funds from operations (“FFO”) per share of $1.15 for second-quarter 2016, beating the Zacks Consensus Estimate of $1.14. The figure also improved from $1.09 reported in the year-ago quarter.
Results were positively impacted by same store cash net operating income (“NOI”) growth and investments.
The company posted revenues of around $1.08 billion, which beat the Zacks Consensus Estimate of $1.04 billion. Further, it compared favorably with the year-ago number of $957.2 million.
Same store cash NOI grew 3.3% year over year, which was led by 4% growth in the seniors housing operating portfolio. Moreover, same store seniors housing operating occupancy increased 100 basis points to 90.3% with revenues per occupied room growth of 3.8%.
Welltower completed gross investments of $356 million (pro rata basis) in the quarter under review. This comprised $243 million in acquisitions/joint ventures, $104 million in development funding and $9 million in loans. These investments were completed with existing relationships.
Welltower exited the quarter with cash and cash equivalents of $466.6 million, up from $217.9 million in at the end of 2015. Moreover, as of Jun 30, 2016, the company had $2.3 billion of available borrowing capacity under its primary unsecured credit facility. Further, the company generated around $64 million through DRIP program.
2016 Outlook
For 2016, Welltower reaffirms normalized FFO per share in a range of $4.50–$4.60. The company maintains its 2016 same store cash NOI growth guidance of 2.75–3.25%. The Zacks Consensus Estimate for 2016 currently stands at $4.56.
Our Take
Welltower’s results, supported by a notable operating portfolio performance, encourage us. In addition, a rise in senior citizen expenditure for healthcare promises strong prospects for the company. However, an anticipated rise in interest rate and intense competition remain matters of concern.
Welltower currently carries a Zacks Rank #3 (Hold). Investors interested in the REIT industry may consider stocks like Apple Hospitality REIT, Inc. (APLE - Free Report) , CoreSite Realty Corporation (COR - Free Report) and CubeSmart (CUBE - Free Report) . Each of these stocks carries a Zacks Rank #2 (Buy).
Note: All EPS numbers presented in this write-up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
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Welltower's (HCN) Q2 FFO, Revenues Beat Estimates; Up Y/Y
Welltower Inc. , a healthcare real estate investment trust (“REIT”), came up with normalized funds from operations (“FFO”) per share of $1.15 for second-quarter 2016, beating the Zacks Consensus Estimate of $1.14. The figure also improved from $1.09 reported in the year-ago quarter.
Results were positively impacted by same store cash net operating income (“NOI”) growth and investments.
The company posted revenues of around $1.08 billion, which beat the Zacks Consensus Estimate of $1.04 billion. Further, it compared favorably with the year-ago number of $957.2 million.
Robust NOI and Investment
Same store cash NOI grew 3.3% year over year, which was led by 4% growth in the seniors housing operating portfolio. Moreover, same store seniors housing operating occupancy increased 100 basis points to 90.3% with revenues per occupied room growth of 3.8%.
Welltower completed gross investments of $356 million (pro rata basis) in the quarter under review. This comprised $243 million in acquisitions/joint ventures, $104 million in development funding and $9 million in loans. These investments were completed with existing relationships.
Welltower exited the quarter with cash and cash equivalents of $466.6 million, up from $217.9 million in at the end of 2015. Moreover, as of Jun 30, 2016, the company had $2.3 billion of available borrowing capacity under its primary unsecured credit facility. Further, the company generated around $64 million through DRIP program.
2016 Outlook
For 2016, Welltower reaffirms normalized FFO per share in a range of $4.50–$4.60. The company maintains its 2016 same store cash NOI growth guidance of 2.75–3.25%. The Zacks Consensus Estimate for 2016 currently stands at $4.56.
Our Take
Welltower’s results, supported by a notable operating portfolio performance, encourage us. In addition, a rise in senior citizen expenditure for healthcare promises strong prospects for the company. However, an anticipated rise in interest rate and intense competition remain matters of concern.
WELLTOWER INC Price, Consensus and EPS Surprise
WELLTOWER INC Price, Consensus and EPS Surprise | WELLTOWER INC Quote
Welltower currently carries a Zacks Rank #3 (Hold). Investors interested in the REIT industry may consider stocks like Apple Hospitality REIT, Inc. (APLE - Free Report) , CoreSite Realty Corporation (COR - Free Report) and CubeSmart (CUBE - Free Report) . Each of these stocks carries a Zacks Rank #2 (Buy).
Note: All EPS numbers presented in this write-up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>