We have issued an updated research report on Ventas, Inc. VTR on Dec 29, 2015.
The Chicago, IL-based real estate investment trust (“REIT”) recently completed the spin-off of majority of its post-acute/skilled nursing facility portfolio into Care Capital Properties, Inc. This spin-off underscores Ventas’ consistent efforts to enhance its shareholders’ value by setting up two separate REITs with distinct strategies.
Further, given Ventas’ size and scale, its diversified portfolio and robust liquidity position, we expect the company to capitalize on opportunities available in the healthcare real estate market and ride on the growth trajectory.
Notably, last October, Regency had announced third-quarter 2015 normalized funds from operations (“FFO”) of $1.09 per share, beating the Zacks Consensus Estimate of $1.06.
However, concentration risks associated with dependence on few tenants, intense competition with national and local operators and any further rise in interest rate loom as concerns before Ventas.
Over the past one month, consensus estimates for the stock for 2015 and 2016 have remained unchanged at $4.44 and $4.18, respectively. Ventas currently has a Zacks Rank #3 (Hold).
Stocks to Consider
Investors interested in the REIT space may consider stocks like Getty Realty Corp. GTY, Mack-Cali Realty Corp. CLI and Arbor Realty Trust Inc. ABR. All these stocks sport a Zacks Rank #1 (Strong Buy).
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.
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