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Key Reasons to Add Ventas Stock to Your Portfolio Right Now
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Ventas, Inc.’s (VTR - Free Report) diverse portfolio of healthcare real estate assets is well-poised to capitalize on favorable industry fundamentals. An aging population and the rise in healthcare expenditure by senior citizens are likely to benefit the senior housing operating portfolio (“SHOP”). The outpatient medical portfolio is expected to gain from the favorable outpatient visit trends. The accretive investments to expand its research portfolio look promising. A healthy balance sheet position is likely to support its growth endeavors.
Last month, this Chicago-based healthcare real estate investment trust (“REIT”) reported first-quarter 2025 results. The company reported normalized funds from operations (“FFO”) per share of 84 cents, beating the Zacks Consensus Estimate of 82 cents. The results reflected better-than-anticipated revenues. Ventas’ same-store cash net operating income (“NOI”) increased year over year.
Shares of this Zacks Rank #2 (Buy) company have gained 1.6% over the past six months, against the industry's decline of 2.9%. Given the strength in its fundamentals, there seems to be additional room for growth of this stock.
Image Source: Zacks Investment Research
Factors That Make Ventas a Solid Pick
Favorable Industry Dynamics: The senior citizen population is expected to rise in the years ahead. As a result, the national healthcare expenditure among senior citizens, who constitute a major customer base for healthcare services and incur higher healthcare expenditures than the average population, is likely to increase in the upcoming period. Notably, the U.S. population aged 80 years and above is expected to grow 28% in the next five years, driving significant demand for senior housing.
In order to meet the rising demand, the company is expanding its SHOP portfolio by converting 45 large-scale senior housing communities (comprising about 5,700 units) from the triple net structure to SHOP. In 2025, Ventas expects its SHOP segment's same-store cash NOI to grow between 11% and 16%.
Focus on OM&R Portfolio: Amid growing outpatient trends, Ventas is committed to capitalizing on this upside within its outpatient medical and research (OM&R) portfolio, which includes outpatient medical buildings and research centers. The growth in the population of people aged 65 years and above is driving the increase in outpatient visits, as they make three times more visits to the doctor than the general population. From 2020 to 2030, the 65+ population is expected to grow by approximately 28%.
VTR’s Accretive Investments: 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. The company owns research centers in life science clusters, with a presence in some of the top-tier research university campuses.
With top-rated tenants and long-term leases, its high-quality portfolio assures steady growth in cash flows. In the OM&R portfolio, Ventas generated 1.3% same-store cash NOI growth in the first quarter of 2025. Ventas expects the OM&R portfolio's same-store cash NOI to grow in the range of 2-3% in 2025.
Balance Sheet Strength: Ventas maintains a healthy balance sheet position. The company has been making efforts to enhance its liquidity position and financial strength. As of March 31, 2025, the company had approximately $2.9 billion of liquidity. In April 2025, Ventas increased its liquidity to $3.6 billion by expanding its unsecured credit facility by $750 million.
In first-quarter 2025, its net debt to further adjusted EBITDA improved to 5.7X year over year from 6.0X. Management expects continued leverage improvement in the balance of this year, driven by senior housing growth.
Image: Bigstock
Key Reasons to Add Ventas Stock to Your Portfolio Right Now
Ventas, Inc.’s (VTR - Free Report) diverse portfolio of healthcare real estate assets is well-poised to capitalize on favorable industry fundamentals. An aging population and the rise in healthcare expenditure by senior citizens are likely to benefit the senior housing operating portfolio (“SHOP”). The outpatient medical portfolio is expected to gain from the favorable outpatient visit trends. The accretive investments to expand its research portfolio look promising. A healthy balance sheet position is likely to support its growth endeavors.
Last month, this Chicago-based healthcare real estate investment trust (“REIT”) reported first-quarter 2025 results. The company reported normalized funds from operations (“FFO”) per share of 84 cents, beating the Zacks Consensus Estimate of 82 cents. The results reflected better-than-anticipated revenues. Ventas’ same-store cash net operating income (“NOI”) increased year over year.
Shares of this Zacks Rank #2 (Buy) company have gained 1.6% over the past six months, against the industry's decline of 2.9%. Given the strength in its fundamentals, there seems to be additional room for growth of this stock.
Image Source: Zacks Investment Research
Factors That Make Ventas a Solid Pick
Favorable Industry Dynamics: The senior citizen population is expected to rise in the years ahead. As a result, the national healthcare expenditure among senior citizens, who constitute a major customer base for healthcare services and incur higher healthcare expenditures than the average population, is likely to increase in the upcoming period. Notably, the U.S. population aged 80 years and above is expected to grow 28% in the next five years, driving significant demand for senior housing.
In order to meet the rising demand, the company is expanding its SHOP portfolio by converting 45 large-scale senior housing communities (comprising about 5,700 units) from the triple net structure to SHOP. In 2025, Ventas expects its SHOP segment's same-store cash NOI to grow between 11% and 16%.
Focus on OM&R Portfolio: Amid growing outpatient trends, Ventas is committed to capitalizing on this upside within its outpatient medical and research (OM&R) portfolio, which includes outpatient medical buildings and research centers. The growth in the population of people aged 65 years and above is driving the increase in outpatient visits, as they make three times more visits to the doctor than the general population. From 2020 to 2030, the 65+ population is expected to grow by approximately 28%.
VTR’s Accretive Investments: 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. The company owns research centers in life science clusters, with a presence in some of the top-tier research university campuses.
With top-rated tenants and long-term leases, its high-quality portfolio assures steady growth in cash flows. In the OM&R portfolio, Ventas generated 1.3% same-store cash NOI growth in the first quarter of 2025. Ventas expects the OM&R portfolio's same-store cash NOI to grow in the range of 2-3% in 2025.
Balance Sheet Strength: Ventas maintains a healthy balance sheet position. The company has been making efforts to enhance its liquidity position and financial strength. As of March 31, 2025, the company had approximately $2.9 billion of liquidity. In April 2025, Ventas increased its liquidity to $3.6 billion by expanding its unsecured credit facility by $750 million.
In first-quarter 2025, its net debt to further adjusted EBITDA improved to 5.7X year over year from 6.0X. Management expects continued leverage improvement in the balance of this year, driven by senior housing growth.
Other Stocks to Consider
Some other top-ranked stocks from the broader REIT sector are Cousins Properties (CUZ - Free Report) and VICI Properties (VICI - Free Report) , each carrying a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Cousins Properties’ 2025 FFO per share is pegged at $2.79, which indicates year-over-year growth of 3.7%.
The Zacks Consensus Estimate for VICI’s full-year FFO per share is $2.34, which indicates an increase of 3.5% from the year-ago period.
Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.