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Welltower (HCN) Tops Q4 FFO, Revenues, Guides for 2017
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Welltower Inc. , a healthcare real estate investment trust (“REIT”), came up with normalized funds from operations (“FFO”) per share of $1.10 for fourth-quarter 2016, beating the Zacks Consensus Estimate of $1.08. However, FFO was lower than the prior-year quarter figure of $1.13.
Results had a positive impact due to robust same store net operating income (“NOI”) growth.
The company posted revenues of around $1.08 billion, which beat the Zacks Consensus Estimate of $1.03 billion. Further, it compared favorably with the year-ago number of $979 million.
For the full year 2016, normalized FFO per share came in at $4.55, beating the Zacks Consensus Estimate of $4.52. The figure also improved from $4.38 reported in 2015.
For full-year 2016, revenues came in at $4.28 billion, almost in line with the Zacks Consensus Estimate of $4.28 billion. The figure improved from $3.86 billion reported in 2015.
Also, the company collaborated with Johns Hopkins Medicine for the promotion of innovative care and wellness of the aging population. The aim is to create programs so as to raise quality, value and connectivity across different health care units.
Quarter in Detail
Same store NOI grew 2.3% year over year. Moreover, same store seniors housing operating revenues per occupied room grew at 4.3%.
Welltower completed gross investments of $878 million (pro rata basis) in the quarter. This comprised $644 million in acquisitions/joint ventures, $137 million in development funding and $97 million in loans. These investments were completed with existing relationships.
Welltower exited the quarter with cash and cash equivalents of $419.4 million, up from $360.9 million at the end of 2015. Moreover, as of Dec 31, 2016, the company had $2.4 billion of available borrowing capacity under its primary unsecured credit facility. Further, the company generated around $14 million through its ATM and DRIP programs.
2017 Outlook
Welltower has provided guidance for 2017. The company expects normalized FFO per share in the range of $4.15–$4.25 for 2017. Also, the company anticipates its 2017 same store cash NOI growth to remain in the range of 2–3%.
Further, in sync with its strategic repositioning of its premier health care portfolio, the company expects 2017 disposition to be around $2 billion.
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.
Some REITs which are expected to report results later this week include Communications Sales & Leasing, Inc. , Lexington Realty Trust (LXP - Free Report) and STORE Capital Corp. .
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 (HCN) Tops Q4 FFO, Revenues, Guides for 2017
Welltower Inc. , a healthcare real estate investment trust (“REIT”), came up with normalized funds from operations (“FFO”) per share of $1.10 for fourth-quarter 2016, beating the Zacks Consensus Estimate of $1.08. However, FFO was lower than the prior-year quarter figure of $1.13.
Results had a positive impact due to robust same store net operating income (“NOI”) growth.
The company posted revenues of around $1.08 billion, which beat the Zacks Consensus Estimate of $1.03 billion. Further, it compared favorably with the year-ago number of $979 million.
For the full year 2016, normalized FFO per share came in at $4.55, beating the Zacks Consensus Estimate of $4.52. The figure also improved from $4.38 reported in 2015.
For full-year 2016, revenues came in at $4.28 billion, almost in line with the Zacks Consensus Estimate of $4.28 billion. The figure improved from $3.86 billion reported in 2015.
Also, the company collaborated with Johns Hopkins Medicine for the promotion of innovative care and wellness of the aging population. The aim is to create programs so as to raise quality, value and connectivity across different health care units.
Quarter in Detail
Same store NOI grew 2.3% year over year. Moreover, same store seniors housing operating revenues per occupied room grew at 4.3%.
Welltower completed gross investments of $878 million (pro rata basis) in the quarter. This comprised $644 million in acquisitions/joint ventures, $137 million in development funding and $97 million in loans. These investments were completed with existing relationships.
Welltower exited the quarter with cash and cash equivalents of $419.4 million, up from $360.9 million at the end of 2015. Moreover, as of Dec 31, 2016, the company had $2.4 billion of available borrowing capacity under its primary unsecured credit facility. Further, the company generated around $14 million through its ATM and DRIP programs.
2017 Outlook
Welltower has provided guidance for 2017. The company expects normalized FFO per share in the range of $4.15–$4.25 for 2017. Also, the company anticipates its 2017 same store cash NOI growth to remain in the range of 2–3%.
Further, in sync with its strategic repositioning of its premier health care portfolio, the company expects 2017 disposition to be around $2 billion.
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). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some REITs which are expected to report results later this week include Communications Sales & Leasing, Inc. , Lexington Realty Trust (LXP - Free Report) and STORE Capital Corp. .
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.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>