The largest real estate investment trust (REIT) nationwide’s stock price is expected to surge 30% in the coming 12 months, analysts say, and has caught the eye of the Wall Street Journal in an article this week.
The daily share price for Ventas, Inc. (NYSE: VTR) was $61.06 as of Friday afternoon. Michael Carroll, an analyst at RBC Capital Markets, tells The Wall Street Journal the stock has a 12-month price target of $80.
The Chicago-based “big three” REIT boasts a market value of $18 billion and a diverse portfolio of 1,438 senior-living communities, skilled-nursing facilities, medical office buildings and hospitals. It operates in 47 states, Canada and the United Kingdom and has been active in large portfolio transactions and as a figurehead in senior living in recent months and years.
Ventas recently completed its all-cash acquisition of 29 Canadian senior living communities from Holiday Retirement. The transaction closed at CAD$957 million (US$897 million).
Prior to that, the REIT completed a $2.6 billion stock and cash acquisition of American Realty Capital Healthcare Trust, Inc. (NASDAQ: HCT), another health care REIT.
“Like its peers, the REIT stands to benefit from two powerful trends: rising health-care spending and an expected surge in the senior population,” The Wall Street Journal says, noting the number of U.S. residents age 75 and over is projected to hit 44 million by 2040, up 144% from 2012.
Ventas’s revenue totaled $2.8 billion last year. Its funds from operations, a standard measure of REIT profitability, totaled $4.14 a share. This year, Ventas expects funds from operations to climb to between $4.39 and $4.43 a share.
While it yields less than peers, it has increased the dividend by 9% a year, on average, in the past 13 years. It raised the payout twice last year.
John Leslie, a portfolio manager with Miller/Howard Investments in Woodstock, N.Y., tells The Wall Street Journal he is betting the dividend grows by at least 5% this year, which could be another catalyst for the stock.
Read the full article here.
Written by Cassandra Dowell