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Welltower Inc. (WELL - Free Report) reported normalized funds from operations (FFO) per share of $1.02 in first-quarter 2020, which surpassed the Zacks Consensus Estimate of $1.01. The reported figure remained unchanged year over year.
The company’s seniors housing operating portfolio was severely impacted by the coronavirus pandemic. In fact, the segment witnessed $7 million of unexpected property-level expenses related to the virus outbreak in March 2020. This impacted the company’s normalized FFO per share.
Moreover, it generated revenues of $1.26 billion, which missed the Zacks Consensus Estimate of $1.28 billion. The top line also compared unfavorably with the year-earlier quarter’s reported figure of $1.27 billion.
Quarter in Detail
Welltower's pro-rata gross investments in the first quarter totaled $538 million. This included $398 billion in acquisitions (four transactions) and $141 million in development funding.
Apart from this, the company completed property dispositions of $708 million, while loan payoffs summed $9 million.
It exited the quarter with $303 million of cash and cash equivalents, up from $249.1 million recorded a year ago. In addition, as of Mar 31, 2020, it had $2.2 billion of available borrowing capacity under its unsecured credit facility.
Share Repurchase
In first-quarter 2020, the company’s board of directors authorized a share repurchase program of up to $1 billion of common stock through Dec 31, 2021.
Dividend Update
Welltower announced a cash dividend of 61 cents per share for the first quarter, representing a 30% sequential decline. The dividend will be paid out on May 28 to stockholders of record as of May 19. This marks the company’s 196th consecutive quarterly cash dividend payout. The dividend was slashed due to the anticipated impacts of the COVID-19 outbreak.
Conclusion
Management predicts the financial headwinds stemming from the pandemic to significantly impact the company’s near-term cash flow.
Nonetheless, amidst growing liquidity stress, the company undertook measures to bolster its liquidity profile. In fact, on Apr 1, it closed a $1-billion term loan. This will provide Welltower with additional balance sheet flexibility.
SL Green Realty Corp. (SLG - Free Report) reported first-quarter 2020 FFO per share of $2.08, surpassing the Zacks Consensus Estimate of $1.70. The figure also compared favorably with the year-ago quarter’s $1.68.
Prologis, Inc. (PLD - Free Report) reported first-quarter 2020 core FFO per share of 83 cents, beating the Zacks Consensus Estimate of 81 cents. Results also compared favorably with the year-ago figure of 73 cents.
Vornado Realty Trust (VNO - Free Report) reported first-quarter 2020 FFO plus assumed conversions as adjusted of 72 cents per share, missing the Zacks Consensus Estimate of 76 cents. The reported figure declined 8.9% year over year.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Welltower (WELL) Surpasses Q1 FFO Estimates, Slashes Dividend
Welltower Inc. (WELL - Free Report) reported normalized funds from operations (FFO) per share of $1.02 in first-quarter 2020, which surpassed the Zacks Consensus Estimate of $1.01. The reported figure remained unchanged year over year.
The company’s seniors housing operating portfolio was severely impacted by the coronavirus pandemic. In fact, the segment witnessed $7 million of unexpected property-level expenses related to the virus outbreak in March 2020. This impacted the company’s normalized FFO per share.
Moreover, it generated revenues of $1.26 billion, which missed the Zacks Consensus Estimate of $1.28 billion. The top line also compared unfavorably with the year-earlier quarter’s reported figure of $1.27 billion.
Quarter in Detail
Welltower's pro-rata gross investments in the first quarter totaled $538 million. This included $398 billion in acquisitions (four transactions) and $141 million in development funding.
Apart from this, the company completed property dispositions of $708 million, while loan payoffs summed $9 million.
It exited the quarter with $303 million of cash and cash equivalents, up from $249.1 million recorded a year ago. In addition, as of Mar 31, 2020, it had $2.2 billion of available borrowing capacity under its unsecured credit facility.
Share Repurchase
In first-quarter 2020, the company’s board of directors authorized a share repurchase program of up to $1 billion of common stock through Dec 31, 2021.
Dividend Update
Welltower announced a cash dividend of 61 cents per share for the first quarter, representing a 30% sequential decline. The dividend will be paid out on May 28 to stockholders of record as of May 19. This marks the company’s 196th consecutive quarterly cash dividend payout. The dividend was slashed due to the anticipated impacts of the COVID-19 outbreak.
Conclusion
Management predicts the financial headwinds stemming from the pandemic to significantly impact the company’s near-term cash flow.
Nonetheless, amidst growing liquidity stress, the company undertook measures to bolster its liquidity profile. In fact, on Apr 1, it closed a $1-billion term loan. This will provide Welltower with additional balance sheet flexibility.
Welltower Inc Price, Consensus and EPS Surprise
Welltower Inc price-consensus-eps-surprise-chart | Welltower Inc Quote
Currently, the company carries 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
SL Green Realty Corp. (SLG - Free Report) reported first-quarter 2020 FFO per share of $2.08, surpassing the Zacks Consensus Estimate of $1.70. The figure also compared favorably with the year-ago quarter’s $1.68.
Prologis, Inc. (PLD - Free Report) reported first-quarter 2020 core FFO per share of 83 cents, beating the Zacks Consensus Estimate of 81 cents. Results also compared favorably with the year-ago figure of 73 cents.
Vornado Realty Trust (VNO - Free Report) reported first-quarter 2020 FFO plus assumed conversions as adjusted of 72 cents per share, missing the Zacks Consensus Estimate of 76 cents. The reported figure declined 8.9% year over year.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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