Welltower Inc. WELL boasts a diversified portfolio of healthcare real estate assets in the key markets of the United States, Canada and the U.K. The favorable senior housing industry, restructuring efforts and a healthy balance sheet are likely to continue aiding this Toledo, OH-based healthcare real estate investment trust (REIT) to ride the growth curve.

Analysts seem bullish on this Zacks Rank #2 (Buy) company. The Zacks Consensus Estimate for WELL’s 2025 FFO per share has moved 3 cents northward over the past week to $4.98.

Shares of this company have gained 13.8% in the past six months against the industry’s 1.9% decline.

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Factors That Make Welltower a Solid Pick

Favorable SHO Portfolio Dynamics: Given an aging population and an expected rise in senior citizens’ healthcare expenditure, Welltower’s seniors’ housing operating (SHO) portfolio is well-poised to experience solid demand.

With a supply-demand imbalance, the portfolio is expected to experience sustained occupancy growth in 2025 and the coming years. Capitalizing on these positive aspects, Welltower’s SHO portfolio is well-prepared for compelling multiyear revenue growth.

In the first quarter of 2025, SHO portfolio’s same-store net operating income (NOI) grew 21.7%. This represents the 10th consecutive quarter in which growth has exceeded 20%. In 2025, management anticipates the same-store SHO NOI to grow within 16.5-21.5%, driven by same-store revenue growth of 9%, occupancy rise of 350 basis points, and expense increase of 5.25%.

Favorable OM Visit Trend: There has been a favorable outpatient visit trend compared with inpatient admissions. Banking on this, the company is optimizing its outpatient medical (OM) portfolio, growing relationships with health system partners, and deploying capital in strategic acquisitions.

Given the favorable secular trends and growing need for value-based care, the company’s efforts to strengthen its OM footprint will boost long-term growth.

Restructuring Efforts: Restructuring initiatives have enabled the company to attract top-class operators, facilitating the company to improve the quality of its cash flows.

In the first quarter of 2025, the company completed pro-rata gross investments of $2.8 billion. This included $2.7 billion in acquisitions and loan funding, and $142 million in development funding. During this period, pro rata property dispositions totaled $381 million and loan repayments totaled $123 million.

Balance Sheet Strength: Welltower maintains a healthy balance sheet position. As of March 31, 2025, it had $8.6 billion of available liquidity. The net debt to adjusted EBITDA was 3.33X, improving from 4.03X year over year, as of March 31, 2025. Moreover, Welltower’s debt maturities are well-laddered, with a weighted average maturity of 5.8 years, thereby enhancing its financial flexibility.

In the first quarter of 2025, S&P Global Ratings and Moody's Investor Service raised their credit ratings related to the company to "A-" with a stable outlook and to "A3" with a stable outlook, respectively.

Other Stocks to Consider

Some other top-ranked stocks from the broader REIT sector are Cousins Properties CUZ and VICI Properties VICI, each carrying a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for CUZ 2025 FFO per share is pegged at $2.79, which indicates year-over-year growth of 3.7%.

The Zacks Consensus Estimate for VICI’s full-year FFO per share is $2.34, which indicates an increase of 3.5% from the year-ago period.

Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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