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On Nov 30, Zacks Investment Research upgraded Ventas Inc. (VTR - Analyst Report) to a Zacks Rank #2 (Buy). This was based on better-than-expected third-quarter 2013 results, improved operational performance and a raised outlook. Also, strategic portfolio restructuring activity and strong healthcare sector fundamentals were the positives.

Why the Upgrade?

Ventas came up with improved third-quarter 2013 results with normalized funds from operations (FFO) per share of $1.04, exceeding the Zacks Consensus Estimate of $1.02 by nearly 2% and the year-ago quarter figure by 8.3%. An uptick in net operating income (NOI) in its private pay seniors housing communities, triple-net lease portfolio and medical office building segment were the major drivers.

In addition, Ventas usually leases its healthcare facilities under "triple net" leases, which insulate the company from short-term market swings, by producing a steady cash flow with escalations, the majority of which are tied to CPI. In relation to this, the lease extension deal inked with its tenant Kindred Healthcare Inc. (KND - Snapshot Report) on Oct 1, bodes well for Ventas’ long-term growth.

Backed by its solid business model, strategic efforts and accretive acquisitions, Ventas raised its outlook for full-year 2013. Notably, Ventas is expected to benefit from its diversified portfolio, growing healthcare spending and aging population in coming quarters as well.

Over the last 30 days, the Zacks Consensus Estimate for 2013 remained flat at $4.14. On the other hand, for 2014, it increased 0.2% to $4.34, respectively. Alongside, the growth forecast for 2013 and 2014 FFO per share of Ventas is 18.97% and 4.94%, respectively.

Other Stocks to Consider

Other players in REIT-Equity Trust – Other industry, which look attractive at current levels, include National Health Investors Inc. (NHI - Snapshot Report) and Sabra Health Care REIT, Inc. (SBRA - Snapshot Report). Both stocks carry a Zacks Rank #1 (Strong Buy).

Note: FFO, a widely used metric to gauge the performance of REITs, are obtained after adding depreciation and amortization and other non-cash expenses to net income.

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