Financial Performance
The company's financial performance was strong, with a fortress balance sheet and a net debt to adjusted EBITDA ratio of 3.8 times. The company's available liquidity was approximately $875 million, comprising cash on the balance sheet, excess revolver, forward equity, and additional ATM capacity. NHI's leverage policy has been lowered from a range of four to five times to a range of three and a half to four and a half times net debt to adjusted EBITDA.
SHOP Growth and Outlook
The SHOP platform continues to drive growth, with NOI increasing by approximately 57% compared to 2024, driven by 7.6% same-store growth and $6 million from transitions and acquisitions. The company expects near-term NOI growth in the high single-digit to low double-digit range, producing strong rates of return in the low to mid-teens. As Kevin Pascoe mentioned, "We expect that the acquisition environment will remain incredibly strong for several years," and NHI is well-positioned to capitalize on this trend.
Valuation and Dividend Yield
With a P/E Ratio of 27.72 and a Dividend Yield of 4.33%, NHI's valuation appears reasonable. The company's ROE is 9.63%, and its ROIC is 6.68%. The Net Debt / EBITDA ratio is -0.22, indicating a healthy debt position. Analysts estimate next year's revenue growth at 4.0%, which is relatively conservative compared to the company's historical performance.
Guidance and Outlook
NHI's guidance for 2026 includes $230 million in additional future investments at an average NOI yield of 7.8%, primarily in SHOP investments. The company expects NAREIT FFO and NFFO per share to grow 6.9% and 1.2%, respectively, and total FAD to grow 7.8% to $250.2 million. With a strong pipeline and a solid balance sheet, NHI is well-positioned for continued growth.