On Nov 30, Zacks Investment Research upgraded
) to a Zacks Rank #2 (Buy). This was based on
better-than-expected third-quarter 2013 results, improved
operational performance and a raised outlook. Also, strategic
portfolio restructuring activity and strong healthcare sector
fundamentals were the positives.
Why the Upgrade?
Ventas came up with improved third-quarter 2013 results with
normalized funds from operations (FFO) per share of $1.04,
exceeding the Zacks Consensus Estimate of $1.02 by nearly 2% and
the year-ago quarter figure by 8.3%. An uptick in net operating
income (NOI) in its private pay seniors housing communities,
triple-net lease portfolio and medical office building segment
were the major drivers.
In addition, Ventas usually leases its healthcare facilities
under "triple net" leases, which insulate the company from
short-term market swings, by producing a steady cash flow with
escalations, the majority of which are tied to CPI. In relation
to this, the lease extension deal inked with its tenant
Kindred Healthcare Inc.
) on Oct 1, bodes well for Ventas' long-term growth.
Backed by its solid business model, strategic efforts and
accretive acquisitions, Ventas raised its outlook for full-year
2013. Notably, Ventas is expected to benefit from its diversified
portfolio, growing healthcare spending and aging population in
coming quarters as well.
Over the last 30 days, the Zacks Consensus Estimate for 2013
remained flat at $4.14. On the other hand, for 2014, it increased
0.2% to $4.34, respectively. Alongside, the growth forecast for
2013 and 2014 FFO per share of Ventas is 18.97% and 4.94%,
Other Stocks to Consider
Other players in REIT-Equity Trust - Other industry, which
look attractive at current levels, include
National Health Investors Inc.
Sabra Health Care REIT, Inc.
). Both stocks carry a Zacks Rank #1 (Strong Buy).
Note: FFO, a widely used metric to gauge the performance of
REITs, are obtained after adding depreciation and amortization
and other non-cash expenses to net income.
KINDRED HLTHCR (KND): Free Stock Analysis
NATL HEALTH INV (NHI): Free Stock Analysis
SABRA HEALTHCR (SBRA): Free Stock Analysis
VENTAS INC (VTR): Free Stock Analysis Report
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