) recently disclosed that it has established an "at-the-market"
equity offering program. Under the program, the company has the
option to sell up to a total of $750 million of its common stock.
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VENTAS INC (VTR): Free Stock Analysis Report
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Ventas plans to utilize the proceeds generated from the stock
sale for general corporate purposes, including financing for
acquisitions and investments as well as for debt payment.
From time to time, Ventas may offer and sell shares through BofA
Merrill Lynch, Barclays,
Goldman, Sachs & Co.
JPMorgan Chase & Co.
) and RBC Capital Markets, as sales agents.
For Ventas, though the stock offering would result in share
dilution, financing for strategic acquisitions and investments
would help augment its top line while paying back of debt would
reduce its interest expenses.
Moreover, only last month, Ventas reported better-than-expected
fourth quarter 2012 results and announced an 8% hike in its
quarterly dividend rate to 67 cents per share for the first
quarter 2013. Its normalized funds from operations (FFO) reached
99 cents per share in the fourth quarter, 2 cents ahead of the
Zacks Consensus Estimate and 10 cents above the prior-year
This was encouraging and we expect the company's strategic move
in Atria and other opportunistic acquisitions to provide
significant upside potential to the stock going forward.
Moreover, being one of the largest healthcare REITs in the U.S.,
Ventas boasts a significantly diversified portfolio and exposure
to nearly all types of facilities.
Also, the healthcare sector is relatively immune to the downturn
in the economy, and provides a steady source of income that
insulates the company from short-term market volatility.
Ventas currently has a Zacks Rank #2 (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.