CareTrust REIT (NasdaqGS:CTRE) - Share price, News & Analysis

CTRE fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	2/6
Past Performance	1/6
Financial Health	3/6
Dividends	4/6

CTRE Stock Overview

Rewards

Trading at 70.5% below our estimate of its fair value

Earnings are forecast to grow 19.11% per year

Risk Analysis

Has a high level of debt

Unstable dividend track record

Large one-off items impacting financial results

Profit margins (4%) are lower than last year (45.4%)

CareTrust REIT Competitors

Welltower

NYSE:WELL

US$40.1b

Ventas

NYSE:VTR

US$22.2b

Healthpeak Properties

NYSE:PEAK

US$16.5b

Medical Properties Trust

NYSE:MPW

US$10.9b

Price History & Performance

Summary of all time highs, changes and price drops for CareTrust REIT
Historical stock prices
Current Share Price	US$17.16
52 Week High	US$24.58
52 Week Low	US$15.90
Beta	1.21
1 Month Change	-2.05%
3 Month Change	-11.18%
1 Year Change	-24.34%
3 Year Change	-32.20%
5 Year Change	-6.94%
Change since IPO	-1.89%

Recent News & Updates

May 02

CareTrust REIT: Worsening Labor Shortage But Improving Occupancy

CareTrust REIT sports a low valuation, but its skilled nursing tenant-operators are facing huge challenges, which has eroded rent coverage for CTRE's properties. The nursing care industry has lost some 240,000 employees over the last few years, and total employment in this industry has not been this low since 1994. President Biden's proposed minimum staffing requirement, if enacted, would severely exacerbate the problem. Fortunately, occupancy is slowly rising at nursing homes. CTRE is the best-in-class skilled nursing REIT.

Shareholder Returns

	CTRE	US REITs	US Market
7D	0.3%	-3.2%	-2.5%
1Y	-24.3%	0.7%	-10.4%

Return vs Industry: CTRE underperformed the US REITs industry which returned 0.7% over the past year.

Return vs Market: CTRE underperformed the US Market which returned -10.4% over the past year.

Price Volatility

Is CTRE's price volatile compared to industry and market?
CTRE volatility
CTRE Average Weekly Movement	4.8%
REITs Industry Average Movement	4.3%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.7%
10% least volatile stocks in US Market	2.8%

Stable Share Price: CTRE is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: CTRE's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2013	16	Dave Sedgwick	https://www.caretrustreit.com

CareTrust REIT, Inc. is a self-administered, publicly-traded real estate investment trust engaged in the ownership, acquisition, development and leasing of skilled nursing, seniors housing and other healthcare-related properties. With a nationwide portfolio of long-term net-leased properties, and a growing portfolio of quality operators leasing them, CareTrust REIT is pursuing both external and organic growth opportunities across the United States.

CareTrust REIT Fundamentals Summary

How do CareTrust REIT's earnings and revenue compare to its market cap?
CTRE fundamental statistics
Market Cap	US$1.67b
Earnings (TTM)	US$7.73m
Revenue (TTM)	US$193.08m

215.5x

P/E Ratio

8.6x

P/S Ratio

Is CTRE overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
CTRE income statement (TTM)
Revenue	US$193.08m
Cost of Revenue	US$8.59m
Gross Profit	US$184.49m
Other Expenses	US$176.76m
Earnings	US$7.73m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.08
Gross Margin	95.55%
Net Profit Margin	4.00%
Debt/Equity Ratio	82.7%

How did CTRE perform over the long term?

See historical performance and comparison

Dividends

6.4%

Current Dividend Yield

77%

Payout Ratio

Valuation

Is CareTrust REIT undervalued compared to its fair value and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

>50%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: CTRE ($17.16) is trading below our estimate of fair value ($58.19)

Significantly Below Fair Value: CTRE is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: CTRE is poor value based on its PE Ratio (215.5x) compared to the US REITs industry average (33.9x).

PE vs Market: CTRE is poor value based on its PE Ratio (215.5x) compared to the US market (15.5x).

Price to Earnings Growth Ratio

PEG Ratio: CTRE is poor value based on its PEG Ratio (11.3x)

Price to Book Ratio

PB vs Industry: CTRE is overvalued based on its PB Ratio (2x) compared to the US REITs industry average (1.7x).

Future Growth

How is CareTrust REIT forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

19.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: CTRE's forecast earnings growth (19.1% per year) is above the savings rate (1.9%).

Earnings vs Market: CTRE's earnings (19.1% per year) are forecast to grow faster than the US market (12.6% per year).

High Growth Earnings: CTRE's earnings are forecast to grow, but not significantly.

Revenue vs Market: CTRE's revenue (7.3% per year) is forecast to grow slower than the US market (8% per year).

High Growth Revenue: CTRE's revenue (7.3% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if CTRE's Return on Equity is forecast to be high in 3 years time

Past Performance

How has CareTrust REIT performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

14.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: CTRE has a large one-off loss of $70.2M impacting its March 31 2022 financial results.

Growing Profit Margin: CTRE's current net profit margins (4%) are lower than last year (45.4%).

Past Earnings Growth Analysis

Earnings Trend: CTRE's earnings have grown by 14.8% per year over the past 5 years.

Accelerating Growth: CTRE's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CTRE had negative earnings growth (-90.5%) over the past year, making it difficult to compare to the REITs industry average (69.5%).

Return on Equity

High ROE: CTRE's Return on Equity (1%) is considered low.

Financial Health

How is CareTrust REIT's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: CTRE's short term assets ($175.1M) exceed its short term liabilities ($50.7M).

Long Term Liabilities: CTRE's short term assets ($175.1M) do not cover its long term liabilities ($698.7M).

Debt to Equity History and Analysis

Debt Level: CTRE's net debt to equity ratio (79.6%) is considered high.

Reducing Debt: CTRE's debt to equity ratio has increased from 68.4% to 82.7% over the past 5 years.

Debt Coverage: CTRE's debt is well covered by operating cash flow (22.5%).

Interest Coverage: CTRE's interest payments on its debt are well covered by EBIT (4.3x coverage).

Balance Sheet

Dividend

What is CareTrust REIT current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

6.41%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: CTRE's dividend (6.41%) is higher than the bottom 25% of dividend payers in the US market (1.54%).

High Dividend: CTRE's dividend (6.41%) is in the top 25% of dividend payers in the US market (4.05%)

Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, CTRE has been paying a dividend for less than 10 years.

Growing Dividend: CTRE's dividend payments have increased, but the company has only paid a dividend for 8 years.

Earnings Payout to Shareholders

Earnings Coverage: At its current payout ratio (77%), CTRE's payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (67.8%), CTRE's dividend payments are covered by cash flows.

Next Steps

Explore strong dividend paying companies in the Real Estate industry.

Management

How experienced are the management team and are they aligned to shareholders interests?

4.5yrs

Average management tenure

CEO

Dave Sedgwick (45 yo)

1.25yrs

Tenure

US$4,549,245

Compensation

Mr. David M. Sedgwick, also known as Dave, has been Chief Executive Officer of CareTrust REIT, Inc. since January 1, 2022 and was its Chief Operating Officer since August 1, 2018 until January 1, 2022 and...

CEO Compensation Analysis

Compensation vs Market: Dave's total compensation ($USD4.55M) is about average for companies of similar size in the US market ($USD5.45M).

Compensation vs Earnings: Dave's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.

Leadership Team

Experienced Management: CTRE's management team is considered experienced (4.5 years average tenure).

Board Members

Experienced Board: CTRE's board of directors are considered experienced (4.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/15 00:00
End of Day Share Price	2022/05/13 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31