CareTrust Ramps Up Quarterly Dividend By 6%

CareTrust REIT has raised its quarterly cash dividend by 6% to $0.265 per share. The real estate investment trust plans to pay the new dividend on April 15 to shareholders of record as of March 31.

CareTrust (CTRE) added about $105.2 million in newly-acquired assets in 2020 that drove the dividend growth. The company’s CEO Greg Stapley said, “The size of dividend increase is consistent with our longstanding practice of matching dividends to asset and earnings growth, while retaining capital for expansion and keeping our payout ratio in a conservative range.”

The company’s annual dividend of $1.06 per share reflects a dividend yield of 4.4%.

Last month, the company reported better-than-expected 4Q revenues of $44.1 million. Analysts were expecting revenues of $43.9 million. The normalized FFO (funds from operations) stood at $0.36 per share, in-line with the Street’s estimates. (See CareTrust REIT stock analysis on TipRanks)

Following the results, Raymond James analyst Jonathan Hughes raised the stock’s price target to $25 (2.6% upside potential) from $24 and maintained a Buy rating.

Hughes said, “We believe the announcement of additional external growth activity – which has historically been the largest incremental driver of the stock – combined with vaccine and more fiscal stimulus optimism are near-term upside catalysts.”

Overall, consensus among analysts is a Strong Buy based on 4 Buys and 1 Hold. The average analyst price target of $24.40 implies that the shares are fully priced at current levels. Shares gained by 78.3% in one year.

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