Today, Welltower Inc. (NYSE:), a real estate investment trust specializing in healthcare infrastructure, disclosed a new equity distribution agreement that could potentially raise up to $5 billion through the sale of common stock. This announcement was made through an 8-K filing with the Securities and Exchange Commission (SEC).
Under the terms of the agreement, Welltower may issue and sell shares of its common stock through sales agents or forward sellers. The sales agents include a list of notable financial institutions such as BofA Securities, Goldman Sachs & Co. LLC, and J.P. Morgan Securities LLC, among others.
The company also has the option to enter into forward sale agreements with these agents or their affiliates, referred to as Forward Purchasers. In such arrangements, the Forward Purchaser or its affiliates would borrow and sell shares of Welltower’s common stock, with the company settling these forward sales agreements at a later date, either through physical settlement, cash settlement, or net share settlement.
The sale of shares will be conducted on the New York Stock Exchange or other available markets, and the total sales will not exceed the $5 billion cap set by the agreement. Welltower will not receive any proceeds from the sale of borrowed shares if they are sold by a Forward Seller.
Investors and interested parties should note that this information is based on the latest SEC filing by Welltower Inc.
In other recent news, Welltower Inc. reported a third-quarter performance that exceeded analyst expectations, leading to an upward revision of its full-year guidance.
The healthcare real estate investment trust recorded an adjusted earnings per share of $0.73 for the quarter that ended on September 30, 2024, surpassing the analyst consensus of $0.38. Revenue for the same period was $2.06 billion, exceeding estimates of $1.95 billion and showing an increase from the previous year.
This strong performance is attributed to robust growth in the company’s Seniors Housing Operating (SHO) portfolio, which reported a 23% YoY same-store net operating income growth. Total portfolio SSNOI also grew by 12.6% compared to the previous year. In light of these recent developments, Welltower has raised its full-year 2024 earnings guidance to $1.75-$1.81 per share, up from its previous forecast of $1.52-$1.60.
The company also announced that it completed $2.4 billion of investments during the quarter, which included $2.2 billion in acquisitions and loan funding. Furthermore, Welltower improved its net debt to Adjusted EBITDA ratio to 3.73x, down from 5.14x a year ago.
Lastly, the board of directors approved a 10% increase in the quarterly dividend, a decision influenced by the company’s strong financial performance and growth prospects.
InvestingPro Insights
Welltower’s recent equity distribution agreement aligns with its strong market position and growth trajectory. According to InvestingPro data, the company boasts a substantial market capitalization of $80.76 billion, reflecting its significant presence in the healthcare REIT sector. This is further supported by an InvestingPro Tip highlighting Welltower as a “prominent player in the Health Care REITs industry.”
The company’s financial health appears robust, with revenue growth of 17.51% over the last twelve months as of Q2 2024. This growth is complemented by an EBITDA growth of 23.64% over the same period, indicating improved operational efficiency. These metrics suggest that Welltower is well-positioned to effectively utilize the potential $5 billion raised through the new equity distribution agreement.
Investors may find Welltower’s dividend history particularly attractive. An InvestingPro Tip notes that the company “has maintained dividend payments for 49 consecutive years,” demonstrating a strong commitment to shareholder returns. Currently, Welltower offers a dividend yield of 2.05%, with a dividend growth rate of 9.84% over the last twelve months.
For those considering Welltower’s stock, it’s worth noting that it’s trading near its 52-week high, with a price that’s 98.42% of its 52-week high value. This performance is reflected in the impressive total return of 64.65% over the past year.
InvestingPro offers 16 additional tips for Welltower, providing a more comprehensive analysis for investors interested in delving deeper into the company’s prospects.
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