Welltower's (WELL) Q4 FFO Beats Estimates, Revenues Up Y/Y

Welltower Inc. (NYSE:WELL) reported normalized funds from operations (FFO) per share of $1.05 in fourth-quarter 2019, which surpassed the Zacks Consensus Estimate by a penny. Further, the bottom line compared favorably with the year-ago quarter figure of $1.01.

Results reflect 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 $1.26 billion, which surpassed the Zacks Consensus Estimate of $1.25 billion. The top line also compared favorably with the year-earlier quarter’s reported figure of $1.24 billion.

In full-year 2019, normalized FFO per share came in at $4.16, in line with the Zacks Consensus Estimate. The figure also climbed 3.2% year over year. Full-year revenues improved 9% to $5.12 billion. Also, the reported figure marginally outpaced the Zacks Consensus Estimate of $5.1 billion.

Quarter in Detail

Total portfolio SSNOI jumped 2.2% year over year, driven by growth across all its segments.

Welltower's pro-rata gross investments in the fourth quarter totaled $1.4 billion. This included $1.1 billion in acquisitions (seven transactions) and $308 million in development funding.

This apart, the company completed property dispositions of $40 billion, while loan payoffs summed $116 million.

The company exited the quarter with $284.9 million of cash and cash equivalents, up from $215.4 million recorded a year ago. In addition, as of Dec 31, 2019, it had $1.4 billion of available borrowing capacity under its primary unsecured credit facility.

Dividend Update

Welltower announced cash dividend of 87 cents per share for the fourth quarter. The dividend will be paid out on Feb 28 to stockholders of record as on Feb 24. This marks the company’s 195^th consecutive quarterly cash dividend payout.

2020 Outlook

Welltower issued 2020 normalized FFO per share guidance of $4.20-$4.30. The Zacks Consensus Estimate for the same is currently pegged at $4.29.

In addition, the company expects its 2020 average blended SSNOI to grow between 1.5% and 2.5%. Further, full-year disposition proceeds are projected around $1.7 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.

Currently, Welltower carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Welltower Inc. Price, Consensus and EPS Surprise

Performance of Other REITs

Highwoods Properties Inc.’s (NYSE:HIW) fourth-quarter FFO per share of 91 cents surpassed the Zacks Consensus Estimate of 90 cents. The figure also improved from 86 cents reported in the year-ago quarter.

Cousins Properties Incorporated (NYSE:CUZ) reported fourth-quarter FFO per share (before TIER transaction costs) of 73 cents, missing the Zacks Consensus Estimate of 74 cents. However, the figure improved from the prior-year quarter’s 67 cents.

Alexandria Real Estate Equities, Inc. (NYSE:ARE) reported fourth-quarter 2019 FFO as adjusted of $1.77 per share, up 5.4% from the year-ago quarter’s $1.68. However, the figure missed the Zacks Consensus Estimate of $1.78.

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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