Here's Why You Should Retain Ventas Stock in Your Portfolio Now

Ventas’ VTR senior housing operating portfolio (SHOP) is likely to benefit from the aging population and the rising healthcare expenditures by senior citizens. Its outpatient medical and research (OM&R) portfolio is expected to gain from the favorable demographics and outpatient visit trends. Efforts to enhance its liquidity position are likely to support its growth endeavors.However, competition from national and local healthcare operators and dependence on few tenants add to this healthcare real estate investment trust (REIT) company’s concerns.What’s Aiding Ventas?The senior citizens’ 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 of healthcare services and incur higher healthcare expenditures than the average population, will likely increase in the upcoming period. Hence, Ventas’ SHOP portfolio is well-poised to capitalize on this positive trend.Ventas is focused on its "Right Market, Right Asset, Right Operator" strategy, enhancing its portfolio quality and operator diversification and increasing its SHOP scale. The favorable supply-demand fundamentals, its well-invested properties and operators supported by its Ventas OI platform are likely to drive growth. In 2025, Ventas expects its SHOP segment's same-store cash NOI to grow between 11.0% and 16.0%.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. Its OM&R assets are aligned with institutional demand with several top-tier research universities and credit tenancy.With top-rated tenants and long-lease terms, its high-quality portfolio assures steady growth in cash flows. In the OM&R portfolio, Ventas generated 2.1% same-store cash NOI growth in the fourth quarter of 2024. The company expects the OM&R portfolio's same-store cash NOI to grow in the range of 2.0-3.0% in 2025.Ventas has been making efforts to enhance its liquidity position and financial strength. As of Dec. 31, 2024, the company had approximately $3.8 billion of liquidity. It has already repaid $1.05 billion of first-quarter 2025 debt maturities. In the fourth quarter of 2024, its net debt to further adjusted EBITDA improved to 6.0X year over year from 6.9X. Management expects continued leverage improvement in 2025, driven by senior housing growth. Its access to diverse capital sources through capital recycling, on-balance sheet financing and internal cash flow provides ample financial flexibility and is likely to support its growth endeavors.Shares of this Zacks Rank #3 (Hold) company have rallied 22.8% over the past three months, outperforming the industry's upside of 6.2%. Image Source: Zacks Investment Research What’s Hurting Ventas?Ventas operates in a competitive market and competes with national and local healthcare operators on a number of factors, including quality, price and range of services provided, reputation, location and demographics of the population in the surrounding area, as well as the financial condition of its tenants and operators. Also, the company’s operators contend with peers for occupancy. This significantly limits its power to raise rents and drive profitability, as well as crack deals at attractive rates.Ventas also faces tenant concentration risk in its triple-net leased properties and OM&R segments. The properties leased to Brookdale Senior Living, Kindred and Ardent accounted for 7.2%, 6.7% and 6.6% of Ventas’ total NOI, respectively, for 2024. Hence, in case of no lease renewal, change in lease agreements or any adverse development with respect to these three tenants, Ventas’ financial condition and results will likely be impacted.Stocks to ConsiderSome better-ranked stocks from the broader REIT sector are Welltower WELL and Cousins Properties CUZ, 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 WELL’s 2025 FFO per share is pegged at $4.93, which indicates year-over-year growth of 14.1%.The Zacks Consensus Estimate for CUZ’s full-year FFO per share is $2.79, which indicates an increase of 3.7% from the year-ago period.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.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ventas, Inc. (VTR): Free Stock Analysis Report Cousins Properties Incorporated (CUZ): Free Stock Analysis Report Welltower Inc. (WELL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks