Welltower Inc. (WELL), headquartered in Toledo, Ohio, is a real estate investment trust (REIT) specializing in health care infrastructure. Valued at $80.5 billion by market cap, the company invests in top senior housing operators, post-acute providers, and health systems and delivers the health care infrastructure necessary to facilitate better treatment.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and WELL definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the REIT - healthcare facilities industry. Welltower's global presence leverages healthcare trends for growth, supported by an experienced management team driving strategic decisions. Its diversified portfolio reduces the risk by investing in various healthcare sectors, strengthening its competitive edge.
Despite its notable strength, WELL slipped 8.6% from its 52-week high of $140.75, achieved on Nov. 27. Over the past three months, WELL stock fell marginally, outperforming the iShares Residential and Multisector Real Estate ETF’s (REZ) 5.6% losses during the same time frame.
In the longer term, shares of WELL rose 42.6% on a YTD basis and climbed 46% over the past 52 weeks, outperforming REZ’s YTD gains of 14.8% and 21.8% returns over the last year.
To confirm the bullish trend, WELL has traded above its 200-day moving average over the past year. However, despite the positive price momentum throughout the year, the stock has been trading below its 50-day moving average recently.
Welltower's success can be attributed to its strong performance in the rapidly growing aging population market. With a 12.6% total portfolio same-store net operating income growth and a standout 23% boost in the senior housing portfolio, the company has seen significant success. As the senior population continues to increase, the demand for healthcare services among this demographic is expected to rise, leading to higher healthcare expenditures.
On Oct. 28, WELL shares closed up marginally after reporting its Q3 results. The company’s revenue of $2.1 billion exceeded Wall Street forecasts of $2 billion. Its FFO was $1.11, surpassing analyst estimates of $1.04. Welltower expects full-year FFO to be between $4.27 and $4.33.
WELL’s rival, Omega Healthcare Investors, Inc. (OHI) shares lagged behind the stock, with a 26.7% uptick on a YTD basis and 25.9% returns over the past 52 weeks.
Wall Street analysts are moderately bullish on WELL’s prospects. The stock has a consensus “Moderate Buy” rating from the 19 analysts covering it, and the mean price target of $140.17 suggests a potential upside of 9% from current price levels.
