WELL vs. MPW: Which Healthcare REIT Stock is the Better Buy Now?

Core Insights - Welltower, Inc. (WELL) and Medical Properties (MPW) are significant players in the healthcare real estate investment trust (REIT) sector, with differing strategies and structures [1][2] - The choice between these two REITs reflects a preference for growth (Welltower) versus stable income (Medical Properties) [3] Group 1: Welltower Overview - Welltower focuses on senior housing, outpatient medical, and post-acute care properties across the U.S., U.K., and Canada, operating over 2,000 senior and wellness housing communities [4] - The company anticipates sustained occupancy growth in its senior housing operating (SHO) portfolio due to a supply-demand imbalance, leading to multi-year revenue growth [5] - Welltower employs "triple net" leases, insulating itself from short-term market fluctuations and ensuring steady revenue growth [6] - The company actively engages in capital recycling to finance investments and development opportunities, enhancing long-term growth prospects [7] - Welltower maintains a strong balance sheet with ample liquidity and favorable credit ratings, allowing access to debt markets under favorable conditions [8] Group 2: Medical Properties Overview - Medical Properties focuses on acquiring and developing net-leased healthcare facilities, with a portfolio of 388 properties and approximately 39,000 licensed beds leased to 51 hospital operating companies [10] - The company relies on long-term net-leased hospitals with CPI-linked rent escalations to ensure stable rental income [11] - Medical Properties actively manages operator concentration risk and employs a disciplined capital-recycling strategy to enhance liquidity and financial flexibility [13][14] - Despite significant debt levels, the company’s disciplined financial management supports ongoing operations [15] Group 3: Financial Estimates and Performance - The Zacks Consensus Estimate for Welltower's 2025 sales and funds from operations (FFO) per share indicates year-over-year growth of 29.8% and 21.5%, respectively [16] - In contrast, Medical Properties' estimates for 2025 sales and FFO per share suggest a decline of 5.1% and 31.3%, respectively [18] - Over the past three months, Welltower shares have increased by 6.5%, while Medical Properties stock has risen by 2%, outperforming the Zacks REIT and Equity Trust - Other industry, which decreased by 1.4% [21] - Welltower is trading at a forward price-to-FFO of 30.97X, above its three-year median, while Medical Properties is at 7.71X, also above its three-year median [22] Group 4: Conclusion - Welltower and Medical Properties both benefit from strong healthcare sector demand but offer different investment profiles, with Welltower positioned for growth and Medical Properties for stable income [25] - Welltower's favorable demographic trends, investment-grade credit ratings, and healthy balance sheet provide it with a competitive edge [25] - For investors seeking long-term growth, Welltower is currently viewed as the more attractive healthcare REIT option [26]