SILA

Sila is a net-lease healthcare REIT (140 properties: medical outpatient buildings, inpatient rehab, surgical/specialty) built for 'predictable, durable and growing income.' The headline 50.6x P/E badly overstates how expensive the stock is — for a property REIT, GAAP net income is suppressed by non-cash depreciation. Adding back the $76.9M of D&A to $33.1M net income implies roughly $110M of FFO (~$2.00/share), putting the stock near 15x FFO, a reasonable-to-fair multiple for a healthcare net-lease name. The $88.8M of dividends paid (~$1.61/share, ~5.3% yield) is comfortably covered by $119M of operating cash flow (~75% payout), so the income looks sustainable. The balance sheet is genuinely conservative: liabilities/equity of just 0.57x, with $250M of untapped ATM capacity and a $75M buyback authorization for dry powder.

The knock is that this is a low-growth, slightly deteriorating story rather than a compounder. Revenue grew only 5.7% to $198M and that growth was largely bought — total liabilities jumped 26.4% to $763M to fund a 4.4% rise in assets — while net income fell 22.4%, EPS fell 20%, and operating cash flow declined 10.3%. ROE is a thin 2.5%. The net-income history is also noisy (FY2021 $403M, FY2022 -$8.0M, FY2023 $24.0M, FY2024 $42.7M, FY2025 $33.1M), reflecting gains/impairments rather than clean earnings power, which is exactly why FFO is the better lens here.