Ventas Soars to a New 52-Week High - Analyst Blog

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Shares of Ventas Inc. ( VTR ) soared to a new 52-week high of $79.10 on Friday, Apr 19, 2013. The company, which is scheduled to report its first-quarter 2013 earnings on Apr 26, has been named as one of the World's Most Admired Real Estate Companies in 2013 in early April. The closing price of this real estate investment trust (REIT) on Apr 19, 2013, was $79.05, representing a solid year-to-date return of 22.5%. The average trading volume over the last 3 months was nearly 1.7 million shares.

Growth Drivers

Ventas has one of the most diversified portfolios in the healthcare sector with exposure to all types of facilities. The product diversity of the company allows it to capitalize on opportunities in different markets based on individual market dynamics, and provides a hard-to-replicate business model with sufficient competitive edge over its peers. Moreover, the company's strategic move in Atria Senior Living augurs well.

Ventas also has a strong balance sheet, which provides its adequate financial flexibility to aim at high-yielding acquisitions, high ROI (return on investments) capital projects and steady dividend payouts. Notably, Ventas increased its first-quarter 2013 cash dividend by 8% to 67 cents per share.

Moreover, Ventas' recognition as one of the World's Most Admired Real Estate Companies in 2013 is based on an annual survey conducted by FORTUNE and the Hay Group, a global management consulting firm. The annual survey recognizes the firms that enjoy the strongest reputations within their industries.

On Feb 15, 2013, Ventas reported better-than-expected fourth-quarter 2012 results. Its normalized FFO (funds from operation) came in at 99 cents per share in the fourth quarter 2012, 2 cents ahead of the Zacks Consensus Estimate and 10 cents above the prior-year quarter figure.

For full-year 2012, the company's normalized FFO came in at $3.80 per share, exceeding the Zacks Consensus Estimate by 1 cent and significantly ahead of the year-ago figure of $3.37 per share. The results were aided by the strategic acquisitions made in 2012 and in the prior year, decent performance of its seniors housing communities and rental escalation from its triple-net lease portfolio.

Notably, Ventas has now delivered positive earnings surprises in 4 straight quarters with an average beat of 2.4%.

Ventas is scheduled to report its first-quarter 2013 earnings on Apr 26, before the opening bell. The Zacks Consensus Estimate for the company's first-quarter FFO is currently pegged at 99 cents per share.

The company currently carries a Zacks Rank #3 (Hold) and has an earnings ESP (Read: Zacks Earnings ESP: A Better Method) of 0.00%. Thus we are not sure about an earnings beat when it reports its first-quarter results.

Estimate Revisions Show Potency

Over the last 60 days, 3 estimates for 2013 have been revised upward, lifting the Zacks Consensus Estimate by 0.5% to $4.06 per share. Furthermore, 3 estimates for 2014 have moved higher, raising the Zacks Consensus Estimate by 1.2% to $4.28 per share.

In addition to Ventas, a number of REITs crafted 52-week highs recently. This includes Prologis Inc. ( PLD ), Health Care REIT Inc. ( HCN ) and Federal Realty Investment Trust ( FRT ).

Note: 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.



FED RLTY INV (FRT): Free Stock Analysis Report

HEALTH CR REIT (HCN): Free Stock Analysis Report

PROLOGIS INC (PLD): Free Stock Analysis Report

VENTAS INC (VTR): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: FRT , HCN , PLD , VTR

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