National Health Investors’ Earnings Call Highlights Strong Start to 2025

National Health Investors ((NHI)) has held its Q1 earnings call. Read on for the main highlights of the call.

The recent earnings call for National Health Investors (NHI) reflected a generally positive sentiment, highlighting strong financial performance and significant investment activity. The company’s robust acquisition momentum and financial health were emphasized, despite some concerns regarding specific transaction costs and the performance of the SHOP segment.

Strong Start to 2025

The first quarter of 2025 marked a strong start for NHI, with results exceeding expectations. This success was attributed to faster acquisitions and better-than-expected cash rent collections. As a result, the company increased its normalized FFO guidance midpoint by $0.08 per share to $4.71, representing a 6.1% year-over-year growth.

Significant Investments

NHI announced investments totaling $174.9 million year-to-date, with an active pipeline of approximately $264 million. This indicates a strong acquisition momentum, suggesting that the company is on track to surpass the previous year’s total investments of $237.5 million.

SHOP Portfolio Growth

Progress was made in transitioning a portfolio of six properties to a new RIDEA partnership, with an expected NOI growth of 12% to 15% for the year. This transition is part of NHI’s strategy to enhance its SHOP portfolio.

Solid Financial Performance

NHI reported a 4.2% increase in net income per diluted common share to $0.74 and a 2.7% increase in normalized FFO per diluted common share to $1.15 compared to the prior year period. This solid financial performance underscores the company’s healthy financial standing.

Healthy Balance Sheet

The company maintains a healthy balance sheet, with a net debt to adjusted EBITDA ratio of 4.1x and $135 million in cash. This strong liquidity position supports NHI’s active investment pipeline.

Transaction Costs

NHI recorded a $1.2 million charge in transaction costs for a large SHOP portfolio that was ultimately not pursued. This impacted net income and FFO metrics, highlighting the challenges in managing transaction costs.

SHOP Performance Concerns

The first quarter SHOP NOI growth was only 4.9% year-over-year, attributed to seasonality and incentives. This has led to concerns about meeting full-year growth targets, despite an improvement in occupancy and resident fees.

SLM Portfolio Challenges

The legacy SLM portfolio has been largely repositioned, with a $2.5 million partial loan repayment. However, ongoing challenges remain in this segment, indicating the need for continued strategic adjustments.

Forward-Looking Guidance

NHI provided optimistic forward-looking guidance, raising its normalized FFO guidance midpoint by $0.08 per share to $4.71, indicating a 6.1% year-over-year growth. The company expects total investments for the year to surpass the previous year’s total, maintaining a 12% to 15% growth outlook in NOI from its SHOP. Additionally, NHI announced a $0.90 per share dividend for the second quarter, supported by a strong balance sheet.

In summary, National Health Investors’ earnings call highlighted a positive outlook with strong financial performance and significant investment activity. While there are challenges in certain segments, the company’s robust acquisition momentum and healthy balance sheet position it well for continued growth in 2025.