SAN CLEMENTE, Calif. - CareTrust REIT, Inc. (NYSE: NYSE:CTRE), a real estate investment trust (REIT) company, announced its intention to launch an underwritten public offering of 11,500,000 shares of its common stock. The offering is subject to market conditions and other factors. In addition, the company will offer underwriters a 30-day option to purchase up to an additional 1,725,000 shares of common stock at the public offering price.
The net proceeds from the offering are slated for contribution to CTR Partnership, L.P., CareTrust REIT's operating partnership. The funds are earmarked for new investments, including the acquisition of 31 skilled nursing facilities through a joint venture arrangement.
Joint lead book-running managers for the offering include Wells Fargo (NYSE:WFC) Securities, BofA Securities, and J.P. Morgan. BMO Capital Markets and KeyBanc Capital Markets are also serving as joint book-running managers.
CareTrust REIT has previously filed a shelf registration statement, including a prospectus with the Securities and Exchange Commission (SEC), which became automatically effective upon filing. The offering will only be made through a prospectus supplement and the accompanying prospectus. Interested parties can obtain these documents from the offices of Wells Fargo Securities, BofA Securities, or J.P. Morgan.
This press release does not constitute an offer to sell or a solicitation of an offer to buy securities. Additionally, the sale of these securities will not be conducted in any state or jurisdiction where such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
CareTrust REIT specializes in the ownership, acquisition, financing, 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 continues to explore growth opportunities across the United States. This news is based on a press release statement.
In other recent news, CareTrust REIT has seen a significant surge in its investment activities. The company recently reported record investments totaling approximately $765 million, and its year-to-date investments have crossed the $900 million mark. This has led to an 84% increase in the company's market capitalization, reaching an enterprise value of $4 billion for the first time.
In response to these developments, several analyst firms have revised their outlooks on CareTrust REIT. KeyBanc has raised its price target for the company to $34, keeping an Overweight rating, while RBC Capital Markets and Baird have increased their price targets to $31 and $28, respectively, both maintaining an Outperform rating.
Further, CareTrust REIT has launched a significant equity distribution agreement potentially worth up to $750 million in collaboration with a consortium of financial institutions. The agreement is part of an "at-the-market" offering, allowing the company to issue and sell shares of its common stock through these agents.
These recent developments demonstrate CareTrust REIT's strong performance and positive outlook. The company has increased its full-year guidance, projecting normalized funds from operations per share to be between $1.46 and $1.48, and funds available for distribution per share to be between $1.50 and $1.52.
InvestingPro Insights
CareTrust REIT's decision to launch a public offering of 11,500,000 shares comes at a time when the company is experiencing strong financial performance and market positioning. According to InvestingPro data, CareTrust's market capitalization stands at an impressive $5.06 billion, reflecting investor confidence in the company's growth strategy.
The REIT's revenue growth has been particularly noteworthy, with a 21.2% increase over the last twelve months and a robust 33.63% growth in the most recent quarter. This strong top-line performance aligns with the company's expansion plans, including the acquisition of 31 skilled nursing facilities mentioned in the offering announcement.
InvestingPro Tips highlight CareTrust's financial strength and market appeal. The company has raised its dividend for 8 consecutive years, demonstrating a commitment to shareholder returns. This is further supported by a current dividend yield of 3.63%, which may attract income-focused investors to the new share offering.
The REIT's profitability is also noteworthy, with a gross profit margin of 95.8% and an operating income margin of 64.07% in the last twelve months. These figures underscore CareTrust's efficient operations and ability to generate substantial profits from its property portfolio.
Investors considering the new share offering should note that CareTrust is trading near its 52-week high, with a price that is 98.97% of its peak. The stock has shown strong performance, with a 56.04% total return over the past year and a 47.44% return year-to-date.
While the company's P/E ratio of 55.79 suggests a premium valuation, the expected growth in net income this year, as indicated by InvestingPro Tips, could justify this multiple. Additionally, the company's liquid assets exceeding short-term obligations and moderate debt levels provide financial flexibility for its expansion plans.
For investors seeking more comprehensive analysis, InvestingPro offers 14 additional tips on CareTrust REIT, providing deeper insights into the company's financial health and market position.
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