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Ventas: Dividend Hike?

Nov. 01, 2017 12:30 PM ETVentas, Inc. (VTR)4 Comments
Aristofanis Papadatos profile picture
Aristofanis Papadatos


  • Ventas is expected to announce a dividend hike this month.
  • The long-term growth prospects of the company are promising.
  • On the other hand, the company is facing some headwinds in the short term.

Ventas (NYSE:VTR) is the second largest healthcare REIT, with properties in the US, Canada and the United Kingdom. As the stock offers an attractive dividend yield, which currently stands at 4.9%, most of its shareholders are holding the stock for its generous dividend. Therefore, as the company is expected to announce a dividend hike this month, many shareholders are wondering what dividend raise they should be expecting.

First of all, Ventas benefits form a series of favorable secular trends. More precisely, as the baby boomer generation ages and the average life expectancy is on the rise, the senior population of the US is expected to markedly grow in the years ahead. More precisely, the group that is above 75 years old is expected to grow by 70% until 2030. In addition, senior citizens spend much more on healthcare than the rest of the population. Even better, the group that is above 75 years old has huge spending power, with an average net worth in excess of $640 K. Thanks to these facts, the healthcare spending is expected to grow by 5.8% per year until 2024. All these trends certainly bode well for the future growth prospects of Ventas.

It is also worth noting that the healthcare real estate market is highly fragmented and hence it is only in the early innings of consolidation. To be sure, its size is estimated around $1 T while no REIT has a market share greater than 3%. Moreover, less than 15% of the total market is REIT-owned. This is a much lower percentage of ownership than the one witnessed in other categories of real estate, such as malls and hotels, which have an approximate 50% REIT ownership. Therefore, there is ample room for Ventas to continue to grow its portfolio.

It is also remarkable

This article was written by

Aristofanis Papadatos profile picture
I am a chemical engineer with a MS in Food Technology and Economics. I am also the author of 2 mathematics books ("Arithmetic calculations without a calculator" and "Word Problems") and perform almost all the calculations in my mind, without a calculator, making it easier to make immediate investing decisions among many alternatives. I invest applying fundamental and technical analysis and mainly use options as a tool for both investing and trading. I have nearly achieved my goal of early retirement, at the age of 45. In my spare time, I follow Warren Buffett's principle: "Some men read playboy. I read financial statements".

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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