Undervalued Community Healthcare Trust Stock Has 71% Upside
Investors love real estate investment trusts (REITs), because they have to legally distribute at least 90% of their taxable income to shareholders in the form of dividends. This can result in some of the most reliable high-yield dividends on Wall Street.
At the same time, REITs have to borrow a lot of money to grow their operations. And high interest rates make borrowing and servicing debt more costly. Interest rates have come down, but not as quickly as some had hoped.
That could change though. A new Federal Reserve chair will mostly likely replace Jerome Powell in May 2026. And, in all likelihood, they will want far lower interest rates, just like President Donald Trump does. And that would be good for a capital-intensive sector like REITs.
One beaten-down REIT with a growing dividend payout to put on your radar is Community Healthcare Trust Inc (NYSE:CHCT).
It’s fair to say that health-care REITs took a beating during the 2020 health crisis. Health-care facilities were forced to deal with lower occupancy rates and higher costs associated with evolving protocols to limit the spread of COVID-19. Even health-care REITs that weathered the crisis were negatively impacted simply by association.
CHCT stock experienced a nosedive along with the rest of the market in early 2020, but it rebounded fairly quickly, erasing those losses by October 2020. In May 2021, CHCT stock hit a new all-time record intraday high of $43.57.
It’s been mostly downhill since then though, with CHCT stock hovering near a multi-year low of $14.64 per share.
Despite the big 17% year-to-date decline in the share price, the outlook remains bright for Community Healthcare Trust, with Wall Street analysts providing a 12-month share price target range of $19.90 to $25.00 per share. This points to potential gains of approximately 36% to 71%.
Chart courtesy of StockCharts.com
About Community Healthcare Trust Inc
Community Healthcare Trust is a health-care REIT that owns and acquires real estate property that’s leased to hospitals, doctors, health-care systems, or other health-care service providers. (Source: “Portfolio Overview,” Community Healthcare Trust Inc, last accessed August 12, 2025.)
The REIT’s $1.2-billion portfolio consists of 200 properties across 36 states, covering 4.46 million square feet (more than 78 NFL football fields). Its biggest holdings are in Texas, which accounts for 16.9% of its portfolio, followed by Illinois (11.7%), Ohio (9.8%), and Florida (8.1%).
Community Healthcare Trust’s properties are 90.7% occupied, with lease expirations ranging from 2025 through 2045. By property type, medical office buildings account for 36.3% of the portfolio, followed by inpatient rehabilitation facilities (19.4%), acute inpatient behavioral (13%), and specialty center (10.2%).
No single tenant accounts for more than 8.8% of the REIT’s total annualized rent. This is good, because some tenants struggled to pay their rent during the pandemic, and continue to do so. That can weigh on earnings.
Wall Street Bullish on REIT’s Earnings
In the second quarter ended June 30, Community Healthcare Trust announced that revenue increased 5.7% to $29.0 million. The net loss grew to $12.5 million, or $0.50 per share, from a second-quarter net loss of $10.4 million, or a loss of $0.42 per share, in 2024. (Source: “Community Healthcare Trust Announces Results for the Three Months Ended June 30, 2024,” Community Healthcare Trust Inc, July 29, 202.)
The REIT’s funds from operations (FFO), which is a figure used by REITs to describe cash flow from operations, were $0.23 per share, compared to $0.43 in the same prior-year period. Adjusted FFO totaled $0.50, down slightly from $0.53 per share in the second quarter of 2024.
During the quarter, the company sold a building in Ohio and amended an operating lease on another property. Subsequent to the end of the second quarter, Community Healthcare acquired one inpatient rehabilitation facility in Florida, which is 100% leased to a tenant with a lease expiration in 2040 and an expected return of approximately 9.4%.
More broadly, Community Healthcare has six properties under definitive purchase agreements, to be acquired after completion and occupancy, for an aggregate expected purchase price of approximately $146.0 million. Its expected returns on these investments are approximately 9.1% to 9.75%. The anticipated closing dates on these properties would be throughout 2025, 2026, and 2027.
Now, the REIT didn’t provide any guidance for the rest of the year or for 2026, but Wall Street has…and it sees the company turning a corner. After Community Healthcare Trust posted a 2024 net loss of $0.23 per share, analysts expect it to report a 2025 net loss of $0.24 per share, before ripping higher to $0.45 per share in 2026. (Source: “Analysis,” Yahoo! Finance, last accessed August 12, 2025.)
CHCT Stock Dividend Raised Every Quarter Since 2015 Inception
Returning value to shareholders is an important part of Community Healthcare’s business. And not just because it legally has to distribute at least 90% of its taxable earnings to shareholders in the form of a dividend. (Source: “Stock and Dividend Information,” Community Healthcare Trust Inc, last accessed September 12, 2025.)
Community Healthcare has increased its payout every quarter since its inception in 2015. Even when CHCT stock was decimated during the 2020 health crisis, the company gave its shareholders a raise. And, despite a falling share price, it continues to do so every quarter.
Back in the third quarter of 2015, CHCT stock paid out $0.1420 per share. Fast forward to the second quarter of 2025, and it paid out $0.4725 per share. That represents a 10-year dividend payout increase of 232%.
CHCT stock’s current quarterly payout translates into an annual distribution of $1.80 per share, for a forward dividend yield of 13.2%.
The Lowdown on CHCT Stock
Community Healthcare Trust Inc is a REIT with a growing, diversified portfolio of health-care properties across 36 states. Unfortunately, the CHCT stock price has been held back by higher interest rates.
For the most part, the REIT’s financials have been solid. Since 2021, its total revenues have grown from $90.5 million to $115.7 million, with operating cash flow hovering around $58.0 million. Community Healthcare’s free cash flow (FCF) increased to $49.9 million in 2022, but it has trended lower since then, coming in at $34.2 million in 2024. Over the trailing 12 months, FCF was $36.4 million.
The REIT’s strong balance sheet, expanding portfolio, and reliably growing dividend have attracted some of the biggest investors on Wall Street. Currently 261 institutions account for 85.73% of all outstanding shares. The two top holders of CHCT stock are BlackRock Inc and The Vanguard Group. (Source: “Holders,” Yahoo! Finance, last accessed August 12, 2025.)