CareTrust REIT Raises Guidance Again as Deal Pace Triples
CareTrust REIT posted Normalized FFO per share of $0.51 in the second quarter, up 19% from a year earlier and its fastest growth rate in over a year.
CareTrust REIT (CTRE), the skilled-nursing and seniors-housing landlord, reported Normalized FFO per share of $0.51 for the second quarter, up 19% from $0.43 a year earlier and ahead of the 14% growth rate posted in the first quarter of 2026. Normalized FAD per share matched that pace, also rising 19% to $0.51. Net income per diluted share rose 9% to $0.38, a slower growth rate than the first quarter's but off a larger base.
The acceleration tracked a sharp increase in investment activity. CareTrust closed $899.6 million of acquisitions in the quarter at a blended stabilized yield of 8.9%, more than triple the $245.1 million it deployed in the first quarter and well above the $561.5 million closed in the fourth quarter of 2025. Total revenue rose to $161.3 million, a 13% jump from the prior quarter and the largest sequential gain in a run that has seen revenue climb every quarter since mid-2025, from $112.5 million in the second quarter of last year.
Two newer lines illustrate where that growth is coming from. Resident fees and services, tied to the company's senior-housing operating portfolio, grew to $4.6 million from $3.9 million in the first quarter and $1.2 million in the fourth quarter of 2025, up from zero as recently as a year ago. Interest income from financing receivables jumped to $11.7 million from $2.8 million in the first quarter, after CareTrust put $467.1 million into financing receivables during the first half of the year, building a $556.2 million balance. General and administrative expense rose to $15.8 million from $14.3 million in the prior quarter, tracking the larger asset base.
The quarter also brought a new disclosure: a $4.7 million provision for loan losses, the first such charge in the five quarters shown in the company's trend table. The item accompanied a rise in leverage, with net debt to annualized normalized run-rate EBITDA climbing to 1.01x from 0.6x in the first quarter, reversing a deleveraging trend that had brought the ratio down from 2.0x a year earlier. Total debt reached $1.21 billion at June 30, including $310 million drawn on the revolving credit facility, which had zero balance at the end of 2025. Available capacity on the $1.2 billion revolver fell to $605 million from the full amount at year-end.
CareTrust raised full-year 2026 guidance for the second consecutive quarter. Normalized FFO per share is now expected to fall between $2.03 and $2.06, up from the $2.00-to-$2.04 range given with first-quarter results, itself an increase over the company's initial 2026 guidance. The new midpoint implies 16.2% growth over 2025, up from the 14.8% growth implied by the prior guidance.
CareTrust kept its quarterly dividend flat at $0.39 a share for a second straight quarter, following an increase from $0.335 disclosed with fourth-quarter results. The payout ratio against Normalized FAD fell to about 76% from 81% in the first quarter, as FAD growth outpaced the unchanged dividend. Weighted average diluted shares rose to 234.2 million from 224.0 million in the prior quarter and 192.9 million a year earlier, reflecting continued equity issuance, including a new $578.2 million forward equity offering disclosed this quarter.
The company's post-quarter investment pipeline stood at $540 million, up from $360 million disclosed with first-quarter results and $500 million disclosed at year-end 2025, suggesting the pace of acquisitions carried into the third quarter.