CareTrust’s Adjusted Funds From Operations per Share Rise 20% in Third Quarter
Key Facts
CareTrust REIT reported on November 5 results for the quarter ended September 30, 2026, recording annual growth of 20% in normalized adjusted funds from operations per diluted share, an operating measure that does not represent accounting net income. The measure was $0.54 per share, up $0.09 from the corresponding quarter of 2025, while total normalized adjusted funds from operations reached $129.2 million. Net income was $83.7 million, or $0.35 per diluted share, unchanged from the year-earlier quarter. The results therefore show expansion in the per-share operating measure alongside stable net income per share. The company also reported a comparable increase in normalized funds available for distribution, adding another operating indicator to the quarterly results.
Normalized funds available for distribution totaled $127.0 million, or $0.53 per diluted share, up $0.09 and 20% year over year. The company closed investments worth $739.5 million during the quarter, at a blended stabilized yield of 8.3%. After quarter-end, it closed additional investments worth $273.8 million at a stabilized yield of 10.6%. The deals brought CareTrust’s investments since the start of 2026 to about $2.9 billion, at a blended stabilized yield of 8.1%. Chief Executive Dave Sedgwick described the investment pace as record-setting and said, "CareTrust’s growth cycle continues to drive year-over-year growth in our asset base and funds from operations."
Expanding outside the United States, the company completed the initial closing of the LNT transaction on October 1, covering 23 completed care homes in the United Kingdom for £552 million, or $733 million, before transaction costs. The announced transaction includes a total of 45 new U.K. care homes from LNT Care Developments valued at about £1.1 billion. CareTrust expects to acquire the remaining 22 homes in stages through 2027 for £528 million. Sedgwick said the company’s relationship with LNT "represents a multiplier for our operating seniors housing and U.K. care home growth engines." The company said its investment pipeline stands at $1.2 billion, including the remaining homes in the LNT transaction.
On its outlook, CareTrust raised the low end of its 2026 range, forecasting normalized funds from operations of $2.08 to $2.09 per share and normalized funds available for distribution of $2.04 to $2.05 per share. The midpoints imply growth of 18.5% and 16.2%, respectively, compared with 2025 results. The outlook is based on a weighted average of 240 million diluted shares and inflation-linked rent increases of 2.5% in long-term leases. The company declared a quarterly dividend of $0.39 per share, representing about 72% of normalized funds from operations and 74% of normalized funds available for distribution in the third quarter. These figures link the company’s raised annual outlook with the dividend it announced for shareholders.
Net debt to annualized adjusted earnings before interest, taxes, depreciation and amortization was 1.4 times on September 30, below the company’s target leverage range of 4.0 to 5.0 times. After quarter-end, CareTrust expanded its revolving credit facility to $2 billion, of which $1.6 billion was available on November 4. The company also reported that settlements of forward equity agreements entered into in May generated $578.2 million, while proceeds from shares issued through its at-the-market program totaled $280.5 million during the quarter. These amounts outline some of the funding sources the company reported during its period of investment activity. CTRE shares closed at $37.18 on November 5, the day results were announced.
The company had scheduled a conference call to discuss its third-quarter results for November 6, 2026, at 11 a.m. Eastern Time. The call provides an opportunity to present details of the results and outlook announced by the company, including its ranges for operating funds and distributions. The figures highlight investment activity during the three months ended September 30, as well as deals closed after the period ended. The U.K. transaction also includes expected acquisitions in stages through 2027. The $1.2 billion investment pipeline, including the remaining homes in the LNT transaction, remains part of the company’s announced investment plans.