Welltower (HCN@NYSE) has announced a change in ticker symbol effective Feb 28, 2018. The new ticker symbol will be WELL.
¿Cómo la veis? Está un 20% por debajo de la media de mil sesiones y en mínimos de 52 semanas.
Yo la tengo en radar, pero precio por debajo de 47. Aunque buscaría un descuento. Este sector está muy volátil
Por si te sirve de ayuda…
https://seekingalpha.com/article/4148177-welltower-looks-cheap-ventas-hard-beat
Morningstar ha subido el fair value de 77$ a 79$.
Welltower Stock: Analyzing The Risks
The Conservative Income Investor - June 22, 2019
A lot of mom and pop investors have been encouraged to purchase shares in Welltower stock (WELL) over the past few years on the basis that it is “safe” real estate investment and source of regular income. If you have never encountered Welltower, it’s basically a giant collection of properties that are rented out by senior centers, assisted living facilities, and a broad array of geriatric healthcare providers.
The investment thesis for a company like Welltower tends to go like this: “This company didn’t cut its dividend during the financial crisis, the stock has increased from $6 per share in the 1970s to the $80s today, and America has an aging population so it owns the type of real estate that will benefit from an uptrend over time.”
While those appeals sound superficially enticing, there are some real issues with paying mid-$80s per share for Welltower stock today.
The first issue is valuation. Welltower is a stock that has historically traded at 12-15x its funds from operations. Right now, its P/FFO ratio is 18.5. That is tied for the most expensive valuation for Welltower in the same past twenty-five years.
But here is the catch. The funds from operations are only growing at a mid-single digit rate. The company likes to brag during conference calls about how its funds from operations have increased from $500 million to over $1.5 billion over the past eight years. But there is a catch. Welltower had to issue 200 million new shares in equity to achieve that growth in rental income (the share count of 192 million eight years ago is now nearly 400 million today). As a result, funds from operations have only increased from $3.41 to $4.20 over the past eight years. That is a compound annual growth rate of 2.64%.
Next, even while Welltower has achieved this 2.64% growth, it has benefited from a very attractive rental market as iit has been raising its rents 4% compared to its twenty-year average of 2.8%. It has loaded up on $13 billion in debt as well, compared to $6 billion eight years ago.
In short, I look at the company and see a firm that has had the double benefit of low interest rates and a strong rental income environment and has still only managed to grow funds from operations at a 2.64%. With over $10 billion of its debt due in the next years, a cooler economy and/or higher borrowing costs will lead to negligible funds from operations growth and also P/FFO compression.
There is historical precedent for this. In 1993, Welltower was trading at 16x P/FFO and had recently raised its rents by 4% annualized during the 1988-1993 stretch. Its borrowing costs were 4.9%. Over the coming decade, the P/FFO fell to 12, rent increases were less than 2% annualized, and borrowing costs rose to a little over 6%. The consequences? An investor could have bought the stock for $22 in both 1993 and 2003. A decade went by with no capital appreciation to show for it, and worst of all, the lack of price appreciation was justified based on the fundamentals and wasn’t the result of 2003 being an awful recession year like 1974 or 2009.
When I run the numbers, I think Welltower in 2019 is trading at 2024 prices. If the P/FFO ratio falls to 15, and funds from operations grow from $4.21 to $5.25 for 4.5% growth in available funds, the stock will trade at $78 per share. You are going to be collecting the 4.1% dividend, but you are not going to have any capital appreciation to show for five years of delayed gratification.
In good economies, people become lazy with valuation. They forget that Welltower rising from $25 in 2009 to $83 is partially a product of the P/FFO switching from an unusual low (10x funds from operations) to an unnusual high (18x funds from operations). The investors of the past decade benefited had their account values rise from valuation expansion. The investor who pays $83 will be forfeiting the effects of future growth to account for valuation compression. High valuations and moderate growth rates are almost always a formula for subpar returns, and I think the typical Welltower investor will be lucky to get 5-6% annual returns over the next 5-7 years. There are heavy debt, valuation, and cyclical forces weighing against any return in excess of that.
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Third quarter 2019 results (30/10/2019)
Quarterly Highlights
- Reported net income attributable to common stockholders of $1.45 per diluted share and normalized FFO attributable to common stockholders of $1.05 per diluted share
- Revised full year net income attributable to common stockholders guidance to a range of $3.06 to $3.10 per diluted share from the previous range of $3.33 to $3.43 per diluted share and increased the midpoint of the guidance range of full year normalized FFO attributable to common stockholders to $4.14 to $4.18 per diluted share as compared to prior guidance of $4.10 to $4.20 per diluted share
- Grew total portfolio same store NOI by 2.6%, driven by consistent performance across all property types
- Improved net debt to Adjusted EBITDA to 5.79x at September 30, 2019 from 6.33x at June 30, 2019
- Announced a strategic collaboration with CareMore Health to improve care, enhance outcomes and to lower the cost of care for senior populations, with the goal of reducing hospitalizations and increasing length of stay in select Welltower communities
- Named to the Dow Jones Sustainability World Index for the second consecutive year and to the Dow Jones Sustainability North America Index for the fourth consecutive year
Outlook for 2019
Net income attributable to common stockholders guidance has been revised to a range of $3.06 to $3.10 per diluted share from the previous range of $3.33 to $3.43 per diluted share, primarily due to changes in projected net gains/losses/impairments and depreciation and amortization. We increased the midpoint of the guidance range of full year normalized FFO attributable to common stockholders guidance to $4.14 to $4.18 per diluted share from the previous range of $4.10 to $4.20 per diluted share. In preparing our guidance, we have updated or confirmed the following assumptions:
- Same Store NOI: We are increasing average blended SSNOI growth guidance from 2.0% to 2.5% to 2.25% to 2.75%.
- General and administrative expenses: We anticipate annual general and administrative expenses of approximately $130 million, including $24 million of stock-based compensation.
- Acquisitions: 2019 earnings guidance includes only acquisitions closed or announced year to date.
- Development: We anticipate funding approximately $183 million of additional development in 2019 relating to projects underway on September 30, 2019.
- Dispositions: We expect disposition proceeds of $3.1 billion at a blended yield of 6.2%. This includes approximately $2.8 billion of proceeds from dispositions and loan payoffs completed to date and $0.3 billion of incremental proceeds from expected property sales and loan payoffs.
Fourth Quarter 2019 Results (12/02/2020)
Fourth Quarter Highlights
- Reported net income attributable to common stockholders of $0.55 per diluted share compared to $0.27 per diluted share in 2018
- Reported normalized FFO attributable to common stockholders of $1.05 per diluted share, compared to $1.01 per diluted share in 2018, representing 4% normalized FFO growth
- Grew total portfolio same store NOI by 2.2%, driven by consistent performance across all property types
- Achieved same store REVPOR growth rate of 3.5% within the Seniors Housing Operating segment, led by the U.K. and U.S. portfolios
- Completed over $1.4 billion of pro rata gross investments comprised of $1.1 billion of high-quality acquisitions at a blended year one yield of 5.3% and expected stabilized yield of 5.6%. Additionally, completed $308 million of development funding with an expected stabilized yield of 7.9%
Full Year 2019 Highlights
- Reported net income attributable to common stockholders of $3.05 per diluted share compared to $2.02 per diluted share in 2018
- Reported normalized FFO attributable to common stockholders of $4.16 per diluted share, compared to $4.03 per diluted share in 2018, representing 3% normalized FFO growth
- Completed $4.8 billion of pro rata gross investments, including $4.1 billion in acquisitions at a blended year one 5.4% yield and expected stabilized yield of 6.0%. Additionally, we completed $682 million in development funding with a 7.8% expected stabilized yield, property dispositions of $2.7 billion at a blended yield of 6.3% and loan payoffs of $192 million at an average yield of 8.7%
- Grew total portfolio average same store NOI by 2.8%, driven by our best-in-class seniors housing portfolio