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Health Care REIT Year To Date And Valuation Numbers 2/08/17

Just like BDCs (Business Development Companies) should sell at logical yields based on their PWAYs (portfolio weighted average yields) - the same should be true of Health Care REITs.

I have provided the earnings updates for CTRE and OHI - but have not included the valuation data in those updates. This data is part of the three part due diligence needed to assess valuation. The third part of the data would provide that cash yields on the properties they own.

An example of a valuation assessment: The yield for CTRE is way too low given the properties they own. But the dividend/FFO ratio is tiny - and that attributes throws off any valuation assessment based on yield. The Price/FFO for CTRE is around sector average. Given its weighting in SNFs, I believe the Price/FFO should be lower.

My data:

Health Care REITs Q1-17

Yields are calculated on Q1-17 dividends. The Dividend/FFO ratio uses the 2017 FFO projection. The percent change columns measures the changes since the beginning of the year. LTM (last twelve month) dividend growth uses Q1-17 minus Q1-16 normalized dividend/share divided by Q1-16 dividend. LTM FFO growth uses Q3-16 minus Q3-15 normalized FFO/share divided by Q3-15 normalized FFO. LTM FAD growth does not use quarterly numbers - but the 2016 midpoint of the yearly guidance compared to the 2015 actual. VTR had a downward adjustment to its dividend and operating metrics when it spun of CCP. CHCT (market cap $298 million) and MRT ($362 million) are too new and too small to be currently included in my coverage. HCP reduced dividend after the spin-off of QCP ($1.52 billion with no Nasdaq FFO projections).

  Share Price 2017 FFO Estimate   Div/ Div/ Percent Change LTM Growth
Company_name_and_ticker 1-01 02-08 1-01 02-08 Yield FFO FAD Price Pr+Div 17 FFO 18 FFO Target Div FFO FAD
Care Capital Properties (CCP) 25.00 25.46 3.10 3.10 8.96 73.55 77.29 1.84 4.12 0.00 NaN 0.00 0.00% -10.7% -1.7%
CareTrust REIT (NASDAQ:CTRE) 15.32 15.44 1.20 1.20 4.40 56.67 58.62 0.78 1.89 0.00 0.00 0.00 0.00% 50.0% 13.7%
Physicians Realty Trust (NYSE:DOC) 18.96 18.77 1.21 1.21 4.79 74.38 104.65 -1.00 0.18 0.00 0.00 0.67 0.00% 3.8% 1.2%
Welltower (HCN) 66.93 66.03 4.45 4.45 5.27 77.30 87.00 -1.34 -1.34 0.00 0.00 -0.47 1.16% 3.6% 3.9%
Health Care Properties (NYSE:HCP) 29.72 30.91 1.92 1.92 4.79 77.08 54.61 4.00 4.00 0.00 0.00 2.16 -35.65% -17.7% 0.7%
Healthcare Realty Trust (NYSE:HR) 30.32 30.45 1.71 1.71 3.94 70.18 75.00 0.43 0.43 0.00 0.00 1.37 0.00% -4.9% 5.3%
Healthcare Trust of America (NYSE:HTA) 29.11 29.80 1.72 1.72 4.03 69.77 84.51 2.37 3.40 0.00 0.00 0.77 1.69% 2.6% 2.2%
LTC Properties (NYSE:LTC) 46.98 46.62 3.19 3.19 4.89 71.47 82.31 -0.77 -0.36 0.00 NaN -1.10 5.56% 4.1% 6.5%
Medical Properties Trust (NYSE:MPW) 12.30 13.02 1.36 1.36 7.07 67.65 75.41 5.85 7.72 0.00 -2.03 -3.91 4.55% -6.3% 3.4%
National Health Investors (NYSE:NHI) 74.17 75.42 5.15 5.15 4.77 69.90 82.38 1.69 2.90 0.00 NaN 0.00 0.00% 1.7% 8.7%
Omega Healthcare Investors (NYSE:OHI) 31.26 32.57 3.37 3.37 7.61 72.40 81.58 4.19 4.19 0.00 0.00 -1.07 8.77% 1.3% 8.2%
Sabra Health Care REIT (NASDAQ:SBRA) 24.42 25.74 2.30 2.30 6.53 73.04 75.00 5.41 5.41 0.00 0.00 3.27 2.44% -6.9% 4.7%
Senior Housing Properties (NYSE:SNH) 18.93 19.54 1.88 1.88 7.98 82.98 86.19 3.22 3.22 0.00 0.00 0.73 0.00% -4.3% 11.0%
New Senior Investment (NYSE:SNR) 9.79 10.26 1.31 1.31 10.14 79.39 99.05 4.80 4.80 0.00 NaN 0.00 0.00% 3.3% 1.9%
Universal Health Realty Income (NYSE:UHT) 65.59 62.97 3.09 3.09 4.13 84.14 85.25 -3.99 -3.99 0.00 NaN 0.00 0.78% 1.4% 8.9%
Ventas (NYSE:VTR) 62.52 62.25 4.29 4.17 4.69 70.02 80.66 -0.43 -0.43 -2.80 0.00 -4.93 0.00% -5.5% 1.4%
Average           5.87 73.25 80.59 1.69 2.26 -0.17   -0.16 0.36% 1.0% 5.0%
The cap weighted Dow Jones REIT ETF RWR has a price change of -0.36% year to date - with dividends its total return is -0.36%.
The RWR has a yield based on LTM dividends of 4.41%. Year over year dividend growth based on last two years of dividends is 41.05%.
The cap weighted Vanguard ETF VNQ has a price change of 0.59% year to date - with dividends its total return is 0.59%.
The Cohen & Steers 'Realty Majors' ETF ICF has a price change of 0.36% year to date - with dividends its total return is 0.36%.
The ICF has a yield based on LTM dividends of 4.51%. Year over year dividend growth based on last two years of dividends is 28.26%.
Health Care Price/FFO Ratios 02-08

The UHT projected 2016 FFO stat is slightly under four times Q1 FFO. DOC IPOed in 2013. CCP was spun off in 2015.

  FFO / Share % FFO Growth Price/FFO 16 FFO Range
Co. 2012 2013 2014 2015 2016 2017 14-15 15-16 16-17 2015 2016 2017 High Low Range
CCP 0.00 0.00 0.00 3.42 3.05 3.10 na -10.82 1.64 7.44 8.35 8.21 305 305 0.00%
CTRE 0.00 0.00 0.00 0.91 1.10 1.20 na 20.88 9.09 16.97 14.04 12.87 110 109 0.91%
DOC 0.00 0.26 0.72 0.74 1.01 1.21 2.78 36.49 19.80 25.36 18.58 15.51 103 99 3.96%
HCN 3.51 3.36 4.13 4.38 4.54 4.45 6.05 3.65 -1.98 15.08 14.54 14.84 457 452 1.10%
HCP 2.76 3.01 3.04 3.16 2.72 1.92 3.95 -13.92 -29.41 9.78 11.36 16.10 274 269 1.84%
HR 1.31 1.32 1.46 1.60 1.62 1.71 9.59 1.25 5.56 19.03 18.80 17.81 164 161 1.85%
HTA 1.22 1.28 1.46 1.54 1.61 1.72 5.48 4.55 6.83 19.35 18.51 17.33 162 160 1.24%
LTC 2.26 2.37 2.55 2.77 3.05 3.19 8.63 10.11 4.59 16.83 15.29 14.61 306 304 0.66%
MPW 0.90 0.96 1.06 1.26 1.27 1.36 18.87 0.79 7.09 10.33 10.25 9.57 128 125 2.36%
NHI 3.18 3.55 4.20 4.67 4.87 5.15 11.19 4.28 5.75 16.15 15.49 14.64 488 486 0.41%
OHI 2.19 2.53 2.85 3.13 3.31 3.37 9.82 5.75 1.81 10.41 9.84 9.66 332 330 0.60%
SBRA 1.41 1.84 2.20 2.14 2.28 2.30 -2.73 6.54 0.88 12.03 11.29 11.19 233 225 3.51%
SNH 1.75 1.69 1.75 1.84 1.88 1.88 5.14 2.17 0.00 10.62 10.39 10.39 192 184 4.26%
SNR 0.00 0.00 0.00 1.01 1.25 1.31 na 23.76 4.80 10.16 8.21 7.83 125 125 0.00%
UHT 2.84 2.77 2.74 2.88 3.03 3.09 5.11 5.21 1.98 21.86 20.78 20.38 300 300 0.00%
VTR 3.80 4.14 4.48 4.47 4.13 4.17 -0.22 -7.61 0.97 13.93 15.07 14.93 414 411 0.73%
Average           6.44 5.82 2.46 14.71 13.80 13.49

Disclosure: I am/we are long OHI, VTR.