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Ventas (VTR) Stock Rises 34.1% in Six Months: Here's How
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Shares of Ventas (VTR - Free Report) have gained 34.1% in the past six months compared with the industry’s growth of 7.9%.
This Chicago-based healthcare real estate investment trust (REIT) is well-positioned to gain from its diverse portfolio of healthcare real estate assets in the key markets of the United States and the U.K. An aging population and the rise in healthcare expenditure by senior citizens are likely to benefit the senior housing operating portfolio (SHOP).
The outpatient medical portfolio is expected to gain from favorable outpatient visit trends. Ventas’ accretive investments to expand its research portfolio are encouraging.
This month, the company, carrying a Zacks Rank #3 (Hold) at present, came up with better-than-expected second-quarter 2024 results. It reported normalized funds from operations (FFO) per share of 80 cents, which surpassed the Zacks Consensus Estimate of 79 cents. The reported figure improved 6.7% year over year. Results reflected growth in occupancy in the SHOP same-store portfolio contributing to higher revenue generation.
Image Source: Zacks Investment Research
Let’s find out the factors behind the surge in the stock price.
The senior citizen population is expected to rise in the years ahead. As a result, the national healthcare expenditure by senior citizens, who constitute a major customer base for healthcare services and incur higher healthcare expenditures than the average population, is likely to increase in the upcoming period.
Per the company’s second-quarter presentation, the U.S. population aged 80 years and above is expected to grow 24% over the next five years. With an expectation of a rising senior citizens population in the years ahead and limited new supply in its markets, VTR is well-prepared for a compelling multiyear growth opportunity.
Ventas’ senior housing portfolio is positioned in markets with favorable demographics, strong net absorption and affordability. Moreover, expert operators who leverage the Ventas Operational Insights platform are expected to drive performance in the company’s SHOP portfolio.
Amid favorable demographics and growing outpatient trends, Ventas is committed to capitalizing on this upside within its outpatient medical and research portfolio, which includes outpatient medical buildings and research centers.
The growth in the people aged 65 years and above is driving the increase in outpatient visits as they make three times more visits to the doctor than the general population. From 2020 to 2030, the 65+ aged population is expected to grow by approximately 15 million. Therefore, this portfolio is well-positioned to capitalize on this rising demand.
Ventas is carrying out accretive investments to enhance its research portfolio, which is essential for the delivery of crucial healthcare services and research related to life-saving vaccines and therapeutics. Ventas owns research centers in life science clusters, with a presence in some of the top-tier research university campuses. With top-rated tenants and long-lease terms, its high-quality portfolio assures steady growth in cash flows.
Ventas maintains a healthy balance sheet position. It has been making efforts to enhance its liquidity position and financial strength. As of Jun 30, 2024, the company had approximately $3.3 billion of liquidity. It has substantially cleared 2024 remaining debt maturities. It also enjoys favorable credit ratings from S&P Global Ratings and Moody’s, providing access to the debt market. The company’s decent financial flexibility is likely to support its growth endeavors.
However, competition from national and local operators limits its power to raise rents and drive profitability. A high interest rate environment adds to its woes.
The Zacks Consensus Estimate for Cousins Properties 2024 FFO per share stands at $2.66, indicating an increase of 1.5% from the year-ago reported figure.
The Zacks Consensus Estimate for Lamar Advertising’s 2024 FFO per share is pinned at $8.08, suggesting year-over-year growth of 8.2%.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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Ventas (VTR) Stock Rises 34.1% in Six Months: Here's How
Shares of Ventas (VTR - Free Report) have gained 34.1% in the past six months compared with the industry’s growth of 7.9%.
This Chicago-based healthcare real estate investment trust (REIT) is well-positioned to gain from its diverse portfolio of healthcare real estate assets in the key markets of the United States and the U.K. An aging population and the rise in healthcare expenditure by senior citizens are likely to benefit the senior housing operating portfolio (SHOP).
The outpatient medical portfolio is expected to gain from favorable outpatient visit trends. Ventas’ accretive investments to expand its research portfolio are encouraging.
This month, the company, carrying a Zacks Rank #3 (Hold) at present, came up with better-than-expected second-quarter 2024 results. It reported normalized funds from operations (FFO) per share of 80 cents, which surpassed the Zacks Consensus Estimate of 79 cents. The reported figure improved 6.7% year over year. Results reflected growth in occupancy in the SHOP same-store portfolio contributing to higher revenue generation.
Image Source: Zacks Investment Research
Let’s find out the factors behind the surge in the stock price.
The senior citizen population is expected to rise in the years ahead. As a result, the national healthcare expenditure by senior citizens, who constitute a major customer base for healthcare services and incur higher healthcare expenditures than the average population, is likely to increase in the upcoming period.
Per the company’s second-quarter presentation, the U.S. population aged 80 years and above is expected to grow 24% over the next five years. With an expectation of a rising senior citizens population in the years ahead and limited new supply in its markets, VTR is well-prepared for a compelling multiyear growth opportunity.
Ventas’ senior housing portfolio is positioned in markets with favorable demographics, strong net absorption and affordability. Moreover, expert operators who leverage the Ventas Operational Insights platform are expected to drive performance in the company’s SHOP portfolio.
Amid favorable demographics and growing outpatient trends, Ventas is committed to capitalizing on this upside within its outpatient medical and research portfolio, which includes outpatient medical buildings and research centers.
The growth in the people aged 65 years and above is driving the increase in outpatient visits as they make three times more visits to the doctor than the general population. From 2020 to 2030, the 65+ aged population is expected to grow by approximately 15 million. Therefore, this portfolio is well-positioned to capitalize on this rising demand.
Ventas is carrying out accretive investments to enhance its research portfolio, which is essential for the delivery of crucial healthcare services and research related to life-saving vaccines and therapeutics. Ventas owns research centers in life science clusters, with a presence in some of the top-tier research university campuses. With top-rated tenants and long-lease terms, its high-quality portfolio assures steady growth in cash flows.
Ventas maintains a healthy balance sheet position. It has been making efforts to enhance its liquidity position and financial strength. As of Jun 30, 2024, the company had approximately $3.3 billion of liquidity. It has substantially cleared 2024 remaining debt maturities. It also enjoys favorable credit ratings from S&P Global Ratings and Moody’s, providing access to the debt market. The company’s decent financial flexibility is likely to support its growth endeavors.
However, competition from national and local operators limits its power to raise rents and drive profitability. A high interest rate environment adds to its woes.
Stocks to Consider
Some better-ranked stocks from the broader REIT sector are Cousins Properties (CUZ - Free Report) and Lamar Advertising (LAMR - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Cousins Properties 2024 FFO per share stands at $2.66, indicating an increase of 1.5% from the year-ago reported figure.
The Zacks Consensus Estimate for Lamar Advertising’s 2024 FFO per share is pinned at $8.08, suggesting year-over-year growth of 8.2%.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.