) is growing through acquisitions. The company is to acquire its
competitor, American Realty Capital Healthcare Trust Inc. in a
stock and cash deal worth $2.6 billion, which would bring on board
143 properties - mainly medical office buildings (MOBs) and seniors
housing assets - as well as a pipeline of over $250 million in
potential investments to Ventas' platform.
Also, it would purchase 29 independent living seniors housing
communities from Holiday Retirement in Canada. The deals fit the
company's strategy of focusing on private pay properties,
strengthening its MOB footprint and international existence. (read:
Ventas to Buy ARC Healthcare for $2.6B
Aided by higher revenues, Ventas' first-quarter 2014 normalized
FFO of $1.09 per share came nearly 2% ahead of the Zacks Consensus
Estimate of $1.07 per share and 6% above the year-ago quarter
figure of $1.03 per share. Total revenue during the quarter reached
$741.5 million, escalating nearly 9% year over year.
Quarterly results at this healthcare real estate investment trust
(REIT) were driven by strategic investments made in 2013 and solid
growth in same-store seniors housing operating and triple-net
leased portfolios. Results also reflect the receipt of fees and
other payments. These positives were partly dwarfed by higher debt
balances, rise in general and administrative expenses, asset sales
and loan repayments.
We expect strategic acquisitions and decent cash flows to add
momentum to the company's growth. Yet, cut-throat competition,
expected rise in interest rate in the long run and the company's
substantial exposure to long-term leased assets remain our
To gain deeper insight into Ventas, you can refer to our updated
research report, which was issued on Jun 26, 2014.
Echoing similar sentiments, over the last 30 days, the Zacks
Consensus Estimate for 2014 moved up 0.7% to $4.41 per share while
that for 2015 climbed 0.9% to $1.94 per share. The stock now has a
Zacks Rank #2 (Buy).
Stocks That Warrant a Look
Investors interested in the REIT industry may consider stocks like
Chatham Lodging Trust
The GEO Group, Inc.
Terreno Realty Corp.
). All these stocks carry a Zacks Rank #1 (Strong Buy).
FFO, a widely used metric to gauge the performance of REITs, is
obtained after adding depreciation and amortization and other
non-cash expenses to net income.
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VENTAS INC (VTR): Free Stock Analysis Report
TERRENO REALTY (TRNO): Free Stock Analysis
CHATHAM LODGING (CLDT): Free Stock Analysis
GEO GRP INC/THE (GEO): Free Stock Analysis
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