2024-02-05 09:10:00 ET
Summary
- Over the past 20 months, CareTrust REIT has outperformed the average REIT, despite macroeconomic and regulatory challenges.
- Healthcare REITs with exposure to Senior Housing should fare well for the foreseeable future, thanks to sharp Cost of Living Adjustments for seniors and demand exceeding supply.
- CTRE sports a superb balance sheet, and pays a handsome and growing dividend, while Wall Street analysts like its upside.
- The company faces significant challenges from labor costs, pressuring the tenant operators, and from a lack of tenant diversification.
Healthcare REITs have started slow in 2024, with total return down (-4.43)%, compared to the equity REIT average (-3.58)%. Meanwhile, the S&P 500, Dow, and Nasdaq 100 are all in positive territory.
In its recent report on the Healthcare REIT sector , Hoya Capital had this to say:
For Senior Housing REITs, the long-awaited recovery is finally taking hold. Robust rent growth is being fueled by rising resident incomes from record-high Cost-of-Living-Adjustments (“COLA”) to Social Security benefits . . . The combined increase in COLA in 2022 and 2023 (15%) is roughly equal to the increase of the previous twelve years (16%) . . . Together with the moderation in new supply growth, we expect SH fundamentals to be among the best in the REIT industry over the next several quarters.
Read the full article on Seeking Alpha
For further details see:
CareTrust REIT: Fat, Stable Yield With Upside