2024-03-27 14:27:17 ET
Summary
- Ventas, Inc. has underperformed its peers and the REIT index over the past 10 years.
- The long-awaited Silver Tsunami of 80+-year-olds may finally be arriving, increasing occupancy and rates in senior living properties.
- Ventas, Inc.'s portfolio, 50% weighted to senior living properties and 23% to outpatient medical offices, is designed to ride that wave of increasing demand from older patients.
Investment Thesis
Ventas, Inc. (VTR) is the second-largest healthcare REIT , with a $17 billion market cap, and is included in the S&P 500 (SP500). They own ~ 1,400 properties, heavily weighted to senior housing but including significant medical office and life science assets.
Performance over the last decade has been disappointing. VTR delivered a negative real total return over the last 10 years, and has underperforming both its closest peer and the REIT index over 1, 2, 3, 5, and 10 year periods. The dividend was cut by 43% in 2020, and has been flat since .
Activists investors have expressed a lack of confidence in management, and won board representation and a cooperation agreement in March 2024.
Looking forward, an investment in VTR today is largely a bet that the long anticipated "silver tsunami" of 80+-year-olds is finally going to raise senior housing occupancy and rates, and reverse a decade of underperformance.
Silver tsunami fans may view the current price, near the lows of a noisy multi-year decline, as a reasonable entry point....
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For further details see:
Ventas: The Silver Tsunami Vs. A Decade Of Underperformance