CareTrust REIT (CTRE) Q2 2024 earnings summary

Executive summary

• Owns, acquires, develops, and leases 285 seniors housing and healthcare properties with 32,495 beds/units across 30 states as of June 30, 2024, with a diversified tenant base and no single tenant exceeding 32.9% of rent.

• Achieved $765 million in investments YTD at a 9.5% yield, including $267.7 million in Q2 2024 at a 9.9% yield, and issued 23.7 million shares for $580 million in gross proceeds, driving 84% market cap growth and surpassing $4 billion in enterprise value.

• Collected 98.3% of contractual rent and interest in Q2 2024, with skilled nursing occupancy surpassing pre-pandemic levels and assisted living occupancy improving year-over-year.

• Maintains a conservative balance sheet, prioritizing low leverage and strategic operator relationships, with a 247% total shareholder return since inception.

• Portfolio expansion in 2024 includes new investments in mortgage loans, mezzanine loans, and preferred equity, with significant acquisitions in California and the Carolinas.

Financial highlights

• Q2 2024 revenues were $68.9 million, up from $51.6 million in Q2 2023; net income was $10.8 million, or $0.07 per diluted share, compared to a net loss of $0.5 million in Q2 2023.

• Normalized FFO for Q2 2024 was $52.5 million ($0.36/share), and normalized FAD was $54.0 million ($0.37/share), both up year-over-year.

• Dividend declared per share was $0.29 in Q2 2024, with a payout ratio of 78% of normalized FAD and 81% of normalized FFO.

• Total assets reached $2.70 billion as of June 30, 2024, up from $2.08 billion at year-end 2023.

• Market cap grew 84% year-over-year, and cash on hand was $100 million at quarter end.

Outlook and guidance

• 2024 guidance: net income per share of $0.86–$0.88, normalized FFO per share of $1.46–$1.48, and normalized FAD per share of $1.50–$1.52.

• Guidance assumes no new investments, dispositions, or financings beyond those already completed or announced, and 2.5% CPI-based rent escalators.

• Interest income projected at $61 million, interest expense at $34 million, and G&A expense at $25–$27 million.

• Management expects continued tenant pressure from inflation, labor shortages, and regulatory changes, but recent Medicare reimbursement increases may partially offset higher costs.

• Operating cash flow, cash balance, available credit, and ATM program are expected to meet obligations for at least the next 12 months.