CTRE Stock: CareTrust Dividend vs FFO, Operators, LNT Deal

The $0.39 dividend against Normalized FFO and Normalized FAD

CareTrust reports NAREIT FFO and FAD (funds available for distribution) and then “Normalized” versions that strip out items it treats as non-recurring, such as transaction costs, foreign-currency gains and unrealized gains on loans. It states its payout ratio against Normalized FFO and Normalized FAD, and those are the lines used here. Net income is not the usual cover measure for a REIT: diluted earnings per share were $0.38 in Q2 2026, so the $0.39 dividend is 103% of GAAP earnings (our arithmetic), but depreciation of about $30 million a quarter is added back in FFO, which is why the company reports 76%.

Full years and the guidance path:

Guidance has been raised three times this year: from $1.90-$1.95 (February 12) to $2.00-$2.04 (May 7), $2.03-$2.06 (August 6) and $2.06-$2.09 (October 2). Subtracting the $0.99 reported for the first half, the October range implies $1.07-$1.10 for the second half, or $0.535-$0.55 a quarter, against $0.51 in Q2 (our arithmetic). The guidance assumes no new investments or issuances beyond those announced, and it includes only the first 24 LNT homes.

Two details of the Q2 figure. First, the company's unadjusted NAREIT FFO was $116.4 million, or $0.50 per share; the $119.7 million Normalized figure adds back a $4.7 million provision for loan losses on two new financing receivables and removes $1.7 million of unrealized gains on loans, among other items. Without the provision add-back the Normalized figure would have been about $0.49 a share (our arithmetic). Second, FAD and FFO are almost the same this year because the deduction for straight-line rent ($4.2 million in Q2) is offset by add-backs such as stock compensation ($3.0 million); the October guidance deducts $21 million of straight-line rent for the year against $17 million in August, as the LNT leases are added.

Why FFO per share grows slower than FFO in dollars

CareTrust funds growth with stock first and debt second. Gross proceeds from the sources in the company's supplement and 10-Q:

Adding the 2024 and 2025 offerings, the ATM sales and the unsettled May 2026 forward gives about $3.76 billion gross since January 2024 (our arithmetic), the basis for the $3.8 billion in the headline. Shares outstanding were 222,746,343 on December 31, 2025 and 236,054,579 on June 30, 2026, up 6.0% in six months (our arithmetic), before the 14.4 million forward shares settle. A new $1.0 billion ATM program was authorized on February 17, 2026 with $876.4 million still available at June 30, and after quarter-end CareTrust entered into forward contracts for another 2.2 million shares ($90.6 million). The October 2 release says the first LNT closing was funded from “the settlement of outstanding forward equity agreements” and a revolver draw; the amount settled is not stated in the release.

The effect is visible in the table above: diluted shares went from 193.1 million in Q2 2025 to 234.3 million in Q2 2026 and the October guidance assumes 240 million for the year, against 233 million in August. Per-share growth of 19% is therefore the more relevant figure for a shareholder than the 44% growth in dollars.

Operator concentration: who pays the rent

At June 30, 2026 CareTrust had 426 net-leased properties producing $447.0 million of annualized in-place rent: $324.4 million (73%) from skilled nursing facilities and $122.6 million (27%) from senior housing (our arithmetic).

The 10-Q reports a different base: operators or borrowers above 10% of total revenue (rental income, resident fees and interest income). In Q2 2026 only Ensign qualified, at 15% (16% for six months), down from 19% in Q2 2025, when PACS was also at 10%. The gap with the supplement's 21% exists because the revenue base now includes about $38.5 million a quarter of interest on financing receivables and loans (our arithmetic: $11.7 million plus $26.8 million) that Ensign does not generate. Ensign and PACS are SEC registrants, so a holder can read their own filings. By location, California is 21% of in-place rent, the UK 18% (142 properties), Texas 10% and Tennessee 10%; the 10-Q gives California 23% and the UK 16% of Q2 revenue.

Collections are not the concern at the moment: the Q2 release reports “100.0% collection of contractual rent and interest.” Regulatory pressure is a live risk for these tenants. The 10-Q notes the July 29, 2026 CMS final rule giving skilled nursing facilities a net 2.4% Medicare Part A increase for fiscal 2027, a CMS request for information on “case-mix creep” that “may pursue future recalibrations” of the payment model beyond 2027, and the California minimum wage step to $22 or $23 an hour on June 1, 2026 and $25 on June 1, 2028.

Rent coverage as CareTrust discloses it

Rent coverage is the operators' trailing-twelve-month EBITDAR (earnings before interest, taxes, depreciation, amortization and rent, after a standard 5% management fee) or EBITDARM (before the management fee) divided by the rent they pay CareTrust. The Q2 2026 supplement reports it one quarter behind, through Q1 2026, for stabilized triple-net properties only.

The distribution is more informative than the average. Share of rent by EBITDAR coverage band, total stabilized portfolio:

What this does and does not show. The tail improved: the share of rent below 1.40x fell from 26% to 10% in two quarters (our arithmetic), and none is below 1.00x. But 10% of rent still sits in the 1.00x-1.39x band, all of it senior housing, covering six operators and 45 properties. The figures cover 24 operators and 292 stabilized properties of the 426 net-leased ones (our arithmetic); a property is excluded if it is held for sale, on Special Focus Facility status, slated for a new operator or recently repositioned and not yet stabilized. The supplement states that the operator information “has been provided by the operators” and that “We have not independently verified this information, but have no reason to believe that such information is inaccurate in any material respect.”

Skilled nursing, senior housing, SHOP and lending

CareTrust now earns income in five ways. Annualized Q2 2026 revenue of $645.4 million splits as follows (the supplement multiplies the quarter by four):

At June 30, 2026 the portfolio had 42,037 skilled nursing beds, 6,236 assisted living units and 8,250 UK care home units in the supplement's table of 628 properties, which includes properties behind loans and financing receivables. The 10-Q counts 39,667 operational beds and units in the 426 owned and leased properties across 33 states and the United Kingdom. SHOP is four senior housing communities with 372 units in Texas and Arizona, operated by independent managers: CareTrust bears the operating risk there (resident fees $4.6 million against $3.7 million of operating expenses in Q2), unlike a lease.

The lending book matters more than it did. Other real estate related investments (four preferred equity investments, 21 secured loans and four mezzanine loans) had a carrying value of $1.1 billion and three financing receivables $556.2 million. Financing receivables went from $92.2 million to $556.2 million in six months. The first credit-loss provision appeared in Q2 2026, $4.7 million, on two new financing receivables.

The October 2026 presentation gives the company's own view of the mix before and after LNT:

Acquisitions: what was bought, at what yield

In the first half of 2026 the 10-Q lists $423.6 million of acquisitions (20 properties, $35.3 million of initial annual cash rent), $467.1 million of financing receivables ($45.4 million of initial annual interest) and $259.6 million of new mortgage loans at a 9.9% weighted effective rate. After June 30 CareTrust bought ten UK senior housing communities for £113.5 million on a triple-net lease with a new operator (annual cash rent £9.3 million, plus £49.2 million of mortgage loans to that operator). The company's ten-year average yield on investments is 9.3% and the supplement's total since 2016 is $6.5 billion at 9.0%. The yield trend is down: 9.7% in 2024, 8.6% in 2025, and 7.8% in the third quarter so far. The pipeline was $540 million on August 6 and about $525 million on October 2, excluding the remaining LNT homes.

The October 1 LNT deal: what the lease pays

On October 1, 2026 CareTrust bought the property companies holding 23 completed care homes (with a 24th awaiting regulatory approval) from LNT Care Developments Holdings, and agreed to buy up to 21 more as they are built, on a rolling basis through December 31, 2027. Each home is priced at £24 million, about £576 million for the first 24 and £504 million for the 21 under development. The homes are leased to subsidiaries of Crystal Care, LNT's operating company, on 20-21 year triple-net leases guaranteed by LNT, with initial rent of £1.4 million a home and 3% annual escalators. CareTrust and LNT plan to move the homes into a SHOP structure once they are leased up, between years two and four after completion, with the first transition by Q4 2027; LNT also granted CareTrust an option, exercisable through September 2027, to buy all of LNT.

The rent arithmetic matters for the dividend. £1.4 million on £24 million is a 5.8% cash yield (our arithmetic), well below the 8.7%-8.9% the company has been reporting for 2026, until the SHOP conversion, where the company underwrites a stabilized yield on cost in the mid- to high-7% range. The company says the lease-up phase is expected to be accretive to Normalized FFO per share “inclusive of straight-line rent adjustments”; FAD, which removes straight-line rent, is the measure where a low cash yield on a £1.1 billion commitment shows. The Chief Investment Officer's description: “we are paid to be patient while the homes fill.” The October guidance carries the first 24 homes only, with $21 million of straight-line rent deducted from FAD, up from $17 million in August.

Debt maturities and leverage

Nothing matures before 2028 and none of the debt is secured. After June 30 the company drew $285 million net on the revolver to fund acquisitions, bringing it to $595 million with $605 million of availability on August 6; on that date total debt was therefore about $1.5 billion (our arithmetic: $400 million plus $500 million plus $595 million), before the October LNT closing. The supplement shows total leverage of 18% and a fixed-charge coverage ratio of 10.71x, with credit-facility covenant compliance (maximum leverage 60%, actual 16%). Net debt to annualized normalized run-rate EBITDA was 1.01x against 0.64x at March 31 and 1.96x at June 30, 2025, and the company states a target range of 4.0x to 5.0x. The 1.01x deducts $577 million of expected net proceeds from unsettled forwards, so it assumes those shares are issued. The May 7, 2026 release lists an investment grade rating upgrade from Moody's.

How it compares with other healthcare REITs and non-traded vehicles

CTRE is a listed, mostly skilled nursing net lessor with a $1.56 dividend that its board can change each quarter. Our other pages on healthcare real estate show different setups. Omega Healthcare is the larger skilled nursing lessor, with many operators on a cash basis, while CareTrust reports 100% collection of contractual rent. National Health Investors has a similar payout against Normalized FFO (79% in our page) and a SHOP segment, but its main tenants are Senior Living Communities and Bickford. Welltower and Ventas are the large senior housing REITs that CareTrust is moving toward with its own SHOP platform. A listed share can be sold on any trading day at a price that moves; a non-traded REIT repurchases under rules its board controls (listed vs non-traded REITs).

What changed in the latest quarter, and what comes next

• The dividend. $0.39, up from $0.335 in Q1 2026 (+16.4%); declared again at $0.39 in Q2, payable July 15, 2026.
• Results. Q2 2026 Normalized FFO $0.51 (+19%), revenue $161.3 million (+43%), a first $4.7 million loan loss provision.
• Guidance. Raised on August 6 and again on October 2, to $2.06-$2.09 Normalized FFO per share.
• LNT. £1.1 billion for 45 UK care homes; first closing on October 1, 2026, the rest through 2027.
• Financing. $578.2 million forward equity offering in May 2026 and $671 million of gross forward proceeds outstanding on August 6; $285 million more drawn on the revolver.
• What is not filed. The Q3 2026 earnings release and 10-Q. CareTrust filed its Q3 2025 10-Q and earnings release on November 5, 2025, and its Q2 2026 filings on August 6, 2026; we have found no announced date for the Q3 2026 report, so early November is a pattern, not a date. A Q3 dividend declaration is not in anything filed as of October 19 and would appear in that release. The items to read in it: Q3 Normalized FFO per share against the $0.535-$0.55 a quarter that guidance implies for the second half, the diluted share count against 240 million, EBITDAR coverage through Q2 2026, interest expense, the settlement of the May forward and the LNT accounting.

What a holder can do with this

• Use the company's cover line, then test it. Normalized FFO per share is $0.51 against the $0.39 dividend (76%). Check NAREIT FFO as well ($0.50, 78%, our arithmetic), because the Normalized figure adds back the loan-loss provision.
• Read per-share, not total, growth. Dollars of FFO are up 44%; per share 19%. Watch the diluted share count and the date the $578.2 million forward settles.
• Track four facts each quarter. The Ensign share of rent (21%), the share of rent under 1.40x EBITDAR coverage (10%), the revolver balance ($595 million on August 6) and the yield on new investments (7.8% in Q3 so far).
• Separate cash rent from accounting rent. FAD deducts straight-line rent; the October guidance deducts $21 million of it for 2026.
• Know what kind of income it is. REIT dividends are reported on Form 1099-DIV with a tax character set after year-end; see our pages on return of capital and Section 199A.
• Check what else you own. Broad REIT funds may hold CTRE, so you may own it indirectly (REIT ETF holdings).

This is analysis of public documents, not investment, legal or tax advice.

FAQ

Sources, read on October 19, 2026: CareTrust REIT, Inc. (CIK 1590717) Form 10-K for 2025 (accession 0001628280-26-007664, filed February 12, 2026); Form 10-Q for the quarter ended June 30, 2026 (0001628280-26-054284, filed August 6, 2026); Form 10-Q for the quarter ended September 30, 2025 (0001628280-25-049531); earnings-release Forms 8-K (Exhibit 99.1) and supplements (Exhibit 99.2) of November 5, 2025 (0001628280-25-049558), February 12, 2026 (0001628280-26-007672), May 7, 2026 (0001628280-26-032150) and August 6, 2026 (0001628280-26-054348); Form 8-K of October 2, 2026 with the LNT press release and investor presentation (0001628280-26-064352). Payout percentages marked our arithmetic, share and equity-issuance sums, the cash yield on the LNT homes, implied second-half guidance, the 292-of-426 coverage share and the August 6 total debt are our arithmetic. Operator coverage figures are provided by operators and not verified by CareTrust. This is analysis of public documents, not investment, legal or tax advice.