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Welltower (WELL) Q1 FFO Meets Estimates, Revenues Up Y/Y

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Welltower Inc. (WELL - Free Report) reported normalized funds from operations (FFO) per share of $1.02 for first-quarter 2019, which came in line with the Zacks Consensus Estimate. Further, the figure compares favorably with the year-ago quarter’s reported tally of 99 cents.

Results reflect healthy same-store net operating income (SSNOI) performance of its seniors housing triple-net, outpatient medical and long-term/post-acute care segments.

Moreover, the company posted revenues of nearly $1.27 billion that outpaced the Zacks Consensus Estimate of $1.24 billion. The revenue figure compares favorably with the year-earlier quarter’s reported tally of approximately $1.1 billion.

Quarter in Detail

Total portfolio SSNOI grew 3.1% year over year, driven by growth across all its segments.

Welltower accomplished $367 million of pro-rata gross investments in the first quarter. This included $259 million in acquisitions, $80 million in development funding and $28 million in loans.

This apart, the company also accomplished total dispositions of $612 million and received $14 million in loan payoffs during the March-end quarter.

The company exited the quarter with $249 million of cash and cash equivalents, up from $202.8 million recorded at the end of the prior-year quarter. In addition, as of Mar 31, 2019, it had $2.6 billion of available borrowing capacity under its new primary unsecured credit facility.

Dividend Update

Welltower announced a cash dividend of 87 cents per share for the first quarter. This dividend will be paid on May 28, to stockholders of record on May 14, 2019. This marks the company’s 192st consecutive quarterly cash dividend payout to stockholders.

2019 Outlook

Welltower reiterated its 2019 normalized FFO per share outlook of $4.10-$4.25. The Zacks Consensus Estimate for the same is currently pegged at $4.18.

In addition, the company anticipates its 2019 average blended SSNOI to be up around 1.25-2.25%. Further, full-year disposition proceeds are projected to be around $1.4 billion.

Our Take

Welltower’s first-quarter 2019 results were buoyed by the decent performance across all of its operating segments. Further, in January, the company entered into a definitive agreement with CNL Healthcare Properties, to acquire a portfolio of 55 Class A medical office and outpatient facilities for $1.25 billion. This will enhance its medical office portfolio.

Welltower Inc. Price, Consensus and EPS Surprise
 

However, significant disposition activity is expected to impact Welltower’s near-term bottom-line performance.

Currently, Welltower has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other REITs

Cousins Properties Incorporated (CUZ - Free Report) reported FFO per share of 20 cents in the January-March quarter, in line with the Zacks Consensus Estimate. The figure came in higher than the prior-year reported tally of 15 cents. 

Duke Realty Corporation’s (DRE - Free Report) first-quarter 2019 core FFO per share of 33 cents surpassed the Zacks Consensus Estimate of 32 cents. Moreover, the figure came in ahead of the year-ago quarter’s reported tally of 30 cents.

Ventas, Inc. (VTR - Free Report) delivered first-quarter normalized FFO of 99 cents, beating the Zacks Consensus Estimate of 96 cents. The reported figure, however, came in lower than the prior year’s $1.05.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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