Mizuho Names Welltower and CareTrust as Top Healthcare REIT Picks

Mizuho has identified Welltower and CareTrust REIT as its top selections in the healthcare real estate investment trust (REIT) sector, highlighting companies with above-average growth and low leverage. The firm's analysis points to attractive price-to-earnings-to-growth ratios and strong balance sheets as key differentiators, even as valuation multiples have risen across the broader healthcare space.

Spotlight on Top Selections

Mizuho named two companies as its top picks based on these criteria:

• Welltower (NYSE:WELL): The firm emphasized Welltower's robust growth outlook and low leverage. This follows a strong financial report where Welltower announced record second-quarter 2026 revenue of $3.54 billion, surpassing analyst estimates and leading the company to raise its full-year outlook. In response to the results, both KeyBanc and Freedom Broker increased their price targets on the stock.
• CareTrust REIT (NYSE:CTRE): Also selected for its growth potential and conservative balance sheet, CareTrust posted mixed second-quarter results, with adjusted earnings per share beating estimates while revenue missed. Despite this, the company lifted its 2026 outlook. However, RBC Capital recently downgraded the stock to Sector Perform.

Strategic Operations and Portfolio Moves

CareTrust's position is supported by its relationship with key tenants, according to the source. The company has significant exposure to Links Healthcare, which operates over 32 facilities. As of the second quarter, 13 of these properties are owned by CareTrust, accounting for 5% of its rental income.

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Links Healthcare is reportedly in the early stages of acquiring First Atlantic Healthcare’s portfolio, which includes 20 nursing homes and assisted-living facilities in Maine. The transaction could be completed before the end of the year and would add over 1,300 beds to Links' operations.

Broader Industry Context

The healthcare REIT sector is navigating ongoing consolidation and evolving regulations. Mizuho's note comes as PACS is set to acquire 32 skilled nursing facilities (SNFs) in Florida from OHI, a move that will make PACS the second-largest tenant for OHI.

Furthermore, operators face new rules from the Center for Medicaid and Medicare Services (CMS). Starting October 1, 2029, new requirements will mandate minimum data set reporting for all residents, regardless of payor. This expansion could increase staffing needs at facilities, particularly impacting those with a high percentage of Medicaid patients.