American Healthcare REIT, Inc. (NYSE:AHR ) Q4 2024 Earnings Conference Call February 28, 2025 1:00 PM ET Company Participants Alan Peterson - Vice President of Investor Relations and Finance Danny Prosky - President and Chief Executive Officer Gabe Willhite - Chief Operating Officer Stefan Oh - Chief Investment Officer Brian Peay - Chief Financial Officer Conference Call Participants Ronald Kamdem - Morgan Stanley Farrell Granath - Bank of America Michael Griffin - Citigroup Michael Carroll - RBC Capital Markets Austin Wurschmidt - KeyBanc Capital Markets Michael Stroyeck - Green Street Operator Good afternoon and thank you for standing by. My name is John and I will be your conference operator today.
American Healthcare REIT (AHR) came out with quarterly funds from operations (FFO) of $0.40 per share, in line with the Zacks Consensus Estimate. This compares to FFO of $0.38 per share a year ago.
The rapidly aging population is a big opportunity for healthcare REITs. Most of them are unfortunately quite expensive. But some opportunities remain. I highlight my top pick.
The REIT sector took a beating in December with an average total return of -6.85% but still finished in the black for full year 2024 (+3.70%). Small cap (-5.98%) and mid cap REITs (-6.62%) outperformed large caps (-7.43%) and micro caps (-8.63%) in December. Only 9.68% of REIT securities had a positive total return in December. 55.63% had a positive total return for all of 2024.
Healthcare REIT stocks are expected to benefit from an aging population, rising healthcare expenditure and technological advancements as they head into 2025.
The typical U.S. REIT returned 9% this year, or 13% with dividends.
American Healthcare REIT (AHR) might move higher on growing optimism about its earnings prospects, which is reflected by its upgrade to a Zacks Rank #1 (Strong Buy).
The Zacks REIT and Equity Trust - Other industry players such as WELL, AHR and HIW are likely to benefit from healthy fundamentals and improving demand.
This article initiates coverage of American Healthcare REIT with a hold rating, as its high property expenses are impacting earnings. The macro forecast for demand growth in senior living and outpatient care should drive future growth for this REIT. The firm's improving debt position and low debt/equity makes it a lower debt risk than some peers.
Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciations have contributed 68%.
REITs are poised for growth with stabilizing interest rates, low new supply, and robust balance sheets supporting higher rents and long-term asset growth. Healthcare REITs benefit from strong senior housing demand and limited new supply, despite valuation debates and management changes at Healthcare Realty. Multifamily and single-family rental sectors show regional variability, but long-term growth driven by demographic trends.
VIK, AHR and ONB made it to the Zacks Rank #1 (Strong Buy) momentum stocks list on December 3, 2024.