The healthcare real estate sector has emerged as a dynamic investment avenue, fueled by an aging population, rising demand for specialized medical facilities, and technological advancements. Healthcare REITs, which invest in properties like senior housing, medical offices, and outpatient centers, are benefiting from robust growth driven by demographic trends and the increasing prevalence of telemedicine.
So, it could be an ideal time to scoop up leading REIT stocks Welltower Inc. (WELL), Ventas, Inc. (VTR), and Omega Healthcare Investors, Inc. (OHI), which are capitalizing on new trends, providing robust dividend yields and attracting investor interest.
Additionally, the sector’s resilience during the COVID-19 pandemic underscored the value of modern, adaptable facilities, further attracting institutional capital. Emerging markets, including Asia Pacific and Latin America, are also seeing growth due to rising incomes and government investments in healthcare.
The global healthcare real estate market is projected to grow at a 7.9% CAGR through 2030.
Considering this upward trend, let’s delve into the details of REITs - Healthcare stocks:
Stock #3: Ventas, Inc. (VTR)
VTR is a leading REIT specializing in senior housing, medical buildings, and healthcare facilities across North America and the UK. Leveraging its operational expertise and Ventas OI platform, the company supports the aging population while driving growth and delivering strong financial performance.
On December 10, VTR announced a quarterly dividend of $0.45 per common share. The dividend will be paid in cash on January 16, to shareholders of record as of December 31, 2024. It pays an annual dividend of $1.80, which translates to a dividend yield of 3.16% at the prevailing price levels. Its four-year average dividend yield is 3.63%.
In the fiscal third quarter ended September 30, 2024, VTR’s total revenues increased 7.5% year-over-year were $1.24 billion. In addition, the net income attributable to common stockholders came in at $19.24 million and $0.05 per share, compared to a loss of $71.12 million and $0.18 per share in the prior year quarter, respectively.
Street expects VTR’s revenue for the fiscal fourth quarter (ending December 31, 2024) to increase 7.7% year-over-year to $ 1.25 billion. Its FFO for the same quarter is expected to increase 5.7% year-over-year to $0.80. In addition, it surpassed the consensus revenue and FFO estimates in all of the trailing four quarters, which is promising.
Shares of VTR have gained 17.2% over the past year and 10% over the past six months to close the last trading session at $57.07.
VTR’s POWR Ratings reflect its robust outlook. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
VTR has a B grade in Growth and Stability. It is ranked #9 out of 14 stocks in the REITs - Healthcare.
Beyond what we have stated above, we also have given VTR grades for Value, Momentum, Sentiment, and Quality. Get all the VTR’s ratings here.
Stock #2: Welltower Inc. (WELL)
WELL is a REIT that focuses on transforming healthcare infrastructure by investing in seniors housing, post-acute communities, and outpatient medical properties across high-growth markets in the U.S., Canada, and the UK.
It pays an annual dividend of $ 2.68, which translates to a dividend yield of 2.16% at the prevailing price levels. Its four-year average dividend yield is 2.94%. The company has grown its dividend payment at a CAGR of 1.6% over the past three years.
During the fiscal third quarter that ended September 30, 2024, WELL’s total revenues increased 23.7% year-over-year to $2.06 billion. In addition, the company’s net income attributable to common stockholders and net income attributable to common stockholders per share came in at $ 449.85 million and $0.73, up 252.9% and 204.2% over the prior-year quarter, respectively.
Analysts expect WELL’s revenue and FFO for the fourth quarter ending December 31, 2024, to increase 25.1% and 16.7% year-over-year to $ 2.19 billion and $ 1.12, respectively. In addition, it surpassed the consensus revenue estimates in all of the trailing four quarters.
Shares of WELL have gained 38.3% over the past year and 19% over the past six months to close the last trading session at $124.24.
WELL’s POWR Ratings reflect its robust outlook. It has an A grade for Sentiment and a B in Growth. It is ranked #8 in the same industry.
Click here to see WELL’s ratings for Value, Momentum, Stability, and Quality.
Stock #1: Omega Healthcare Investors, Inc. (OHI)
OHI is a REIT specializing in financing and capital for the long-term healthcare sector, focusing on skilled nursing facilities across the U.S. and the UK. OHI partners with 81 operators to identify quality healthcare investments offering optimal risk/reward for investors.
It pays an annual dividend of $2.68, which translates to a dividend yield of 7.18% at the prevailing price levels. Its four-year average dividend yield is 8.40%.
OHI’s total revenues increased 14% year-over-year to $276.03 million in the fiscal third quarter that ended on September 30, 2024. Its adjusted funds from operations came in at $ 203.07 million, up 11.5% year-over-year. Moreover, its net income available to common stockholders and earnings per common share available to common stockholders stood at $ 111.76 million and $0.42, up 22.3% and 13.5% over the prior-year quarter, respectively.
The market projects OHI’s revenue for the fiscal fourth quarter (ending December 31, 2024) to increase 10.9% year-over-year to $226.28 million. Its FFO for the same quarter is likely to increase 6.4% year-over-year to $0.72. In addition, it surpassed the consensus FFO estimates in each of the trailing four quarters.
Shares of OHI have gained 20.1% over the past year and 9.2% over the past six months to close the last trading session at $36.89.
OHI’s bright prospects are apparent in its POWR Ratings. It has a B for Quality. It is ranked #4 in the same industry.
Click here to see OHI’s ratings for Growth, Momentum, Value, Stability, and Sentiment.
What To Do Next?
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WELL shares fell $0.14 (-0.11%) in premarket trading Wednesday. Year-to-date, WELL has declined -1.42%, versus a 0.44% rise in the benchmark S&P 500 index during the same period.
About the Author: Kritika Sarmah
Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.
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