Welltower's (WELL) Q3 FFO Beats Estimates, Revenues Up Y/Y

Welltower Inc. (NYSE:WELL) reported normalized funds from operations (FFO) per share of $1.05 for third-quarter 2019, which surpassed the Zacks Consensus Estimate by a penny. Further, the bottom line compares favorably with the year-ago quarter figure of $1.04.

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

Moreover, the company generated revenues of nearly $1.27 billion, which lagged the Zacks Consensus Estimate of $1.32 billion. The top line, however, compares favorably with the year-earlier quarter’s reported figure of approximately $1.24 billion.

Quarter in Detail

Total portfolio SSNOI jumped 2.6% year over year, driven by growth across all its segments.

Welltower accomplished $435 million of pro-rata gross investments in the third quarter. This included $294 million in acquisitions (seven transactions) and $141 million in development funding.

This apart, the company completed property dispositions of $2 billion, while loan payoffs summed $62 million.

The company exited the quarter with $266 million of cash and cash equivalents, up from the $191.2 million recorded a year ago. In addition, as of Sep 30, 2019, it had $1.7 billion of available borrowing capacity under its primary unsecured credit facility.

Dividend Update

Welltower announced a cash dividend of 87 cents per share for the third quarter. This dividend will be paid out on Nov 21 to stockholders of record as on Nov 13, 2019. This marks the company’s 194^th consecutive quarterly cash dividend payout.

2019 Outlook

Welltower increased the mid-point of its 2019 normalized FFO per share guidance to $4.14-$4.18 from the prior band of $4.10-$4.20. The Zacks Consensus Estimate for the same is currently pegged at $4.15.

In addition, the company raised its 2019 average blended SSNOI expectation to 2.25-2.75% from 2-2.5% previously estimated. Further, full-year disposition proceeds are projected at around $3.1 billion. This includes year-to-date dispositions proceeds and loan payoffs of $2.8 billion and expected proceeds of $0.3 billion.

Conclusion

Continued strength across all of its operating segments is a positive for Welltower. In addition, its efforts to expand the company’s outpatient medical portfolio through accretive acquisitions are encouraging. The company’s strong balance sheet also supports these buyout initiatives.

Welltower Inc. Price, Consensus and EPS Surprise

Currently, Welltower 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

Highwoods Properties Inc.’s (NYSE:HIW) third-quarter FFO per share of 88 cents surpassed the Zacks Consensus Estimate of 85 cents. The reported tally excluded the net impact of 5 cents relating to the company’s market rotation plan. The figure also improved 2.3% year over year.

Cousins Properties Incorporated (NYSE:CUZ) reported third-quarter 2019 FFO per share (before TIER transaction costs) of 72 cents, outpacing the Zacks Consensus Estimate of 69 cents. Further, the figure came in higher than the prior-year quarter’s reported tally of 63 cents.

Ventas, Inc. (NYSE:VTR) delivered third-quarter 2019 normalized FFO per share of 96 cents, beating the Zacks Consensus Estimate of 94 cents. However, the figure came in lower than the year-ago tally of 99 cents.

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.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>