We would not consider NWH as 'need to own' stocks today. NWH investors are concerned about a distribution cut. The payout ratio will be 100% in 2024. In addition to (very weak) momentum, our concern lies in the distribution and debt levels. While cheap, the distribution is at risk of being cut, and debt is too high. A recent joint venture which would have reduced financial exposure collapsed. NWH is selling assets to reduce debt, but of course, growth prospects will also be impaired with fewer assets. While occupancy remains good at 97%, as noted the payout ratio with no cut is going to be above 100% in 2024. Lower rates should help the stock, but the recovery may take longer than expected.
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