CareTrust REIT (CTRE) Q3 2024 earnings summary

Executive summary

• Q3 2024 net income was $33.4 million, or $0.21 per share, with normalized FFO of $60.9 million ($0.38 per share) and normalized FAD of $61.9 million ($0.39 per share); revenue rose 39% year-over-year to $77.4 million.

• Year-to-date investments reached $916.5 million at a 9.4% yield, with a $500 million acquisition of 31 skilled nursing assets in Tennessee and Alabama expected to close by year-end.

• Market cap grew 123% year-to-date, with 98.7% of contractual rent and interest collected.

• Portfolio includes 326 properties and 35,406 beds/units across 31 states, with strong diversification and the top 10 tenants accounting for 84.3% of rent.

• Major equity issuance of $1.1 billion YTD, $500 million under ATM in Q3, and cash on hand of $234 million with no borrowings on the $600 million revolver.

Financial highlights

• Q3 2024 revenues were $77.4 million, up from $55.9 million in Q3 2023; net income attributable to CareTrust REIT was $33.4 million, up from $8.7 million year-over-year.

• Normalized FFO for Q3 2024 was $60.9 million ($0.38 per share), and normalized FAD was $61.9 million ($0.39 per share).

• Dividend per share was $0.29 for Q3 2024, with a normalized FFO payout ratio of 74.3%.

• Total assets reached $2.92 billion as of September 30, 2024, up from $2.08 billion at year-end 2023.

• Net debt to annualized normalized run rate EBITDA at 0.08x, down from 2.5x a year ago.

Outlook and guidance

• 2024 guidance: normalized FFO per share of $1.49–$1.50 and normalized FAD per share of $1.53–$1.54, assuming all YTD investments and only the pending Northeast acquisition.

• Projected 2024 investments exceed $1.4 billion at a 9.3% average stabilized yield, with a $700 million pipeline.

• Guidance excludes the $500 million Tennessee deal, which is expected to drive double-digit FFO per share growth in 2025.

• Estimated 2.5% CPI-based rent escalators under long-term net leases.

• Consensus growth projections through 2026 position the company at the lowest multiple among healthcare REITs.