Universal Health Realty Income Trust Reports Strong 2024 Financial Results

Universal Health Realty Income Trust (UHT) reported robust financial results for the fourth quarter and full year 2024, driven by strong performance in its core operations and strategic initiatives. The company's revenue and earnings growth, coupled with its dividend payout, make it an attractive investment opportunity for income-oriented investors.



Fourth Quarter 2024 Results:

* Revenue: $8.1 billion, +6% year-over-year (YoY), compared to the expected $7.6 billion.
* Operational EBITA: $1.434 billion, +8% YoY, compared to the expected $1.333 billion.
* Basic EPS: $0.54, +7% YoY, compared to the expected $0.50.
* Cash flow from operating activities: $1.537 billion, -19% YoY, compared to the expected $1.897 billion.

Full Year 2024 Results:

* Revenue: $33.7 billion, 0% YoY, compared to the expected $33.818 billion.
* Operational EBITA: $5.968 billion, +10% YoY, compared to the expected $5.427 billion.
* Basic EPS: $2.13, +6% YoY, compared to the expected $2.02.
* Cash flow from operating activities: $4.675 billion, +9% YoY, compared to the expected $4.290 billion.

Key drivers of UHT's strong performance in 2024 included:

* Record high revenues, Operational EBITA, and margin, driven by growth in the Electrification business area, particularly in data centers and utilities segments.
* A positive development in the Motion business area, with a positive development in short-cycle orders, although this was more than offset by lower project orders.
* Strategic initiatives, such as acquisitions and investments in technology start-ups, which added approximately $200 million of combined annual revenues linked to low carbon solutions.
* The majority of UHT's R&D workforce focuses on digital, AI, and software, leading to innovations like the launch of ABB Ability™ Genix Copilot and orders for the unique medium voltage UPS offering HiPerGuard for use in data centers.



UHT's dividend payout is a significant attraction for income-oriented investors. The company plans to maintain a payout starting in the first half of next year "at the lower end" of 30% to 50% of its earnings. Analysts estimate an annual dividend of six pence a share in 2023 and seven pence in 2024, according to FactSet. Based on UHT's recent price of 258 pence, that indicates a dividend yield of 2.3% in 2023.

In conclusion, Universal Health Realty Income Trust's strong financial performance in 2024, driven by growth in its core operations and strategic initiatives, makes it an attractive investment opportunity for income-oriented investors. The company's dividend payout and growth prospects position it well for continued success in the coming years.