CareTrust REIT (CTRE) Q3 2024 earnings summary

Executive summary

• Achieved record-setting growth in 2024, with Q3 net income of $33.4 million, normalized FFO of $60.9 million ($0.38 per share), and normalized FAD of $61.9 million ($0.39 per share), supported by a 123% year-over-year market cap increase.

• Completed or announced $1.4 billion in investments YTD, including a $500 million acquisition of 31 skilled nursing assets in Tennessee/Alabama and a $57 million Northeast deal, both expected to close by year-end.

• Raised $1.1 billion in gross proceeds from equity issuances, supporting robust investment activity and maintaining a strong balance sheet with net debt to EBITDA at 0.08x and significant liquidity.

• Portfolio includes 326 properties and 35,406 beds/units across 31 states, with strong tenant and geographic diversification.

• Sold underperforming skilled nursing assets, resolving all such properties for the year.

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), both up from the prior year.

• Dividend per share was $0.29 for Q3 2024, with a normalized FFO payout ratio of 74%.

• Total assets reached $2.92 billion as of September 30, 2024.

• Gross margin for Q3 2024 was 44%, up from 25% in Q3 2023.

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.

• Full-year impact of 2024 investments expected to drive meaningful FFO per share growth in 2025, even without additional investments.

• Investment pipeline of $700 million at an average estimated yield of 9.5%, with further large portfolio opportunities under evaluation.

• Management expects continued growth in rental and interest income from recent acquisitions and loan originations.

• Guidance assumes no new major transactions except the $57 million Northeast acquisition expected to close in November 2024.