Shares of Ventas (VTR) have gained 13.9% in the past three months compared with the industry’s 0.8% growth.This Chicago-based healthcare real estate investment trust (REIT) is well-poised to benefit from its diverse portfolio of healthcare real estate assets in the key markets of the United States and the United Kingdom. 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 expecte ...

Core Insights - The primary focus for income investors is generating consistent cash flow from liquid investments, which can come from various sources including dividends [1][2] Company Overview: Ventas (VTR) - Ventas is a Chicago-based real estate investment trust (REIT) in the seniors housing sector, with a year-to-date share price change of 8.95% [3] - The company currently pays a dividend of $0.48 per share, resulting in a dividend yield of 2.99%, which is lower than the industry average of 5.33% and the S&P 500's yield of 1.76% [3] - Ventas has increased its annualized dividend to $1.92, reflecting a 6.7% increase from the previous year, with an average annual increase of 0.37% over the last five years [4] Dividend and Earnings Growth - The payout ratio for Ventas is currently 56%, indicating that the company distributes 56% of its trailing 12-month earnings per share as dividends [4] - The Zacks Consensus Estimate for Ventas's earnings per share in 2025 is $3.44, which represents a year-over-year growth rate of 7.84% [5] Investment Considerations - Dividends are favored by investors as they enhance stock investing profits, reduce overall portfolio risk, and offer tax advantages [6] - While high-growth firms typically do not provide dividends, established companies like Ventas are viewed as strong dividend options [7] - Ventas is considered a compelling investment opportunity, currently holding a Zacks Rank of 3 (Hold) [7]

Group 1 - The recent market downturn has negatively affected stocks across various sectors, including those not directly impacted by tariffs, exemplified by Ventas Inc. (NYSE: VTR) [2] - The focus is on defensive stocks with a medium- to long-term investment horizon, indicating a strategy aimed at stability during market volatility [2] Group 2 - iREIT+HOYA Capital emphasizes income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging opportunities [1]

Core Viewpoint - Ventas shares have increased by approximately 2.2% since the last earnings report, outperforming the S&P 500, but there are concerns about whether this positive trend will continue leading up to the next earnings release [1]. Estimates Movement - Estimates for Ventas have trended downward over the past month, indicating a negative outlook [2]. VGM Scores - Ventas has a subpar Growth Score of D, a strong Momentum Score of A, and a Value Score of D, placing it in the bottom 40% for the value investment strategy. The overall aggregate VGM Score for the stock is D [3]. Outlook - The overall direction of estimate revisions for Ventas has been downward, with a net zero change in magnitude. The stock holds a Zacks Rank of 3 (Hold), suggesting an expectation of in-line returns in the coming months [4]. Industry Performance - Ventas is part of the Zacks REIT and Equity Trust - Other industry. Healthpeak, a competitor in the same industry, has seen a slight gain of 0.4% over the past month. Healthpeak reported revenues of $697.99 million for the quarter ended December 2024, reflecting a year-over-year increase of 26.1% [5]. Healthpeak Earnings Expectations - For the current quarter, Healthpeak is projected to report earnings of $0.46 per share, which represents a year-over-year change of 2.2%. The Zacks Consensus Estimate for Healthpeak has increased by 0.3% over the last 30 days, and it also holds a Zacks Rank of 3 (Hold) with a VGM Score of D [6].

Core Viewpoint - Ventas, Inc. is well-positioned to leverage favorable industry fundamentals, particularly due to an aging population and increasing outpatient medical trends, supported by a strong balance sheet and strategic investments in research [1][3][8]. Group 1: Industry Dynamics - The senior citizen population is projected to grow significantly, with those aged 80 and above expected to increase by over 28% in the next five years, leading to higher healthcare expenditures [3]. - The outpatient medical sector is benefiting from trends where individuals aged 65 and older make three times more doctor visits than the general population, with this demographic expected to grow by approximately 28% from 2020 to 2030 [5]. Group 2: Company Strategy - Ventas is expanding its senior housing operating portfolio (SHOP) by converting 45 large-scale senior housing communities, totaling about 5,700 units, to meet rising demand, with expectations of same-store cash NOI growth between 11.0% and 16.0% in 2025 [4]. - The company is also investing in its outpatient medical and research portfolios, focusing on enhancing healthcare services and life-saving research, with a presence in top-tier research university campuses [6]. Group 3: Financial Performance - Ventas reported a 2.1% same-store cash NOI growth in its outpatient medical and research (OM&R) portfolio for the fourth quarter of 2024, with expectations of 2.0-3.0% growth in 2025 [7]. - The company maintains a healthy balance sheet with approximately $3.8 billion in liquidity as of December 31, 2024, and has repaid $1.05 billion of debt maturities due in the first quarter of 2025 [8][10]. - The net debt to further adjusted EBITDA improved to 6.0x year over year from 6.9x, with management anticipating continued leverage improvement driven by senior housing growth [10]. Group 4: Earnings Outlook - Analysts are optimistic about Ventas's funds from operations (FFO) per share growth, with the Zacks Consensus Estimate for 2025 FFO revised to $3.41, aligning with the company's guidance of $3.35-$3.46 for the same period [11].

Core Viewpoint - Ventas (VTR) has experienced a significant stock price increase of 14.1% over the past three months, outperforming the industry growth of 0.3%, driven by favorable demographics and strategic investments in healthcare real estate assets [1][4]. Company Performance - In the fourth quarter of 2024, Ventas reported normalized funds from operations (FFO) per share of 81 cents, exceeding the Zacks Consensus Estimate by one cent, with a notable 16.9% increase in same-store cash net operating income (NOI) from its senior housing operating portfolio (SHOP) [3][5]. - The SHOP segment is projected to see same-store cash NOI growth between 11.0% and 16.0% in 2025, supported by low new supply and an increasing population aged 80 and above [5][6]. Market Trends - The aging population in the U.S. is expected to drive higher healthcare expenditures, particularly among senior citizens, which will benefit Ventas' senior housing and outpatient medical portfolios [4][6]. - The outpatient medical portfolio is anticipated to grow due to favorable trends in outpatient visits, with the population aged 65 and above making three times more visits to doctors than the general population [6]. Investment Strategy - Ventas is actively making accretive investments to enhance its research portfolio, which is crucial for healthcare services and research related to life-saving treatments [7]. - The company has a strong liquidity position, with approximately $3.8 billion available as of December 31, 2024, and an improved net debt to further adjusted EBITDA ratio of 6.0X, down from 6.9X year over year [9]. Future Outlook - The combination of favorable demographics, increasing outpatient trends, and strategic investments positions Ventas for continued growth and a positive stock trend [10].

Core Viewpoint - Ventas (VTR) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Rising earnings estimates for Ventas suggest an improvement in the company's underlying business, likely leading to an increase in stock price [5][10]. Earnings Estimate Revisions - Ventas is projected to earn $3.40 per share for the fiscal year ending December 2025, reflecting a year-over-year increase of 6.6% [8]. - Over the past three months, the Zacks Consensus Estimate for Ventas has risen by 0.6% [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 (Strong Buy) stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Ventas to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating strong potential for market-beating returns in the near term [9][10].

Property Management and Operations - As of December 31, 2024, Atria Senior Living, Inc. managed 199 properties, accounting for 18.6% of total NOI in the SHOP segment[38]. - The outpatient medical buildings are primarily leased to health systems and unrelated medical practices, requiring enhanced plumbing and electrical systems[41]. - The portfolio is geographically diversified, with California accounting for over 10% of total revenues for the year ended December 31, 2024[62]. - The outpatient medical buildings and research centers are often located on or near university and academic medical campuses[42]. - The NNN segment's significant tenant concentration includes Brookdale Senior Living, Inc. at 7.2% of total NOI and Kindred Healthcare, LLC at 6.7%[54]. Financial Interests and Investments - The company holds a 34% ownership interest in Atria, allowing it to appoint two members to Atria's Board of Directors[39]. - As of December 31, 2024, the company held warrants for 11.1 million shares of Brookdale common stock, exercisable at $3.00 per share[55]. - The leases in the NNN segment typically contain annual rent escalators based on CPI increases, with provisions for termination under specific circumstances[52]. Employee Engagement and Development - The company employs 498 individuals, none of whom are subject to collective bargaining agreements[65]. - As of December 31, 2024, over 40% of the company's employees have been promoted or transferred internally, reflecting a commitment to career development[73]. - The company offers an industry-leading compensation and benefits package, with low employee contributions for medical, dental, and wellness programs[71]. - The company conducts annual employee engagement surveys through an independent third party to measure progress on key employee issues[70]. - The company invests in employee growth and development opportunities, enhancing organizational resilience and performance management[73]. - The company’s management succession planning includes regular reviews of executive strengths and gaps to optimize performance[76]. Corporate Sustainability and Insurance - The company has a robust, data-driven strategy for corporate sustainability, with measurable goals reported annually in its Corporate Sustainability Report[78]. - The company maintains comprehensive insurance coverage for its properties, including property and liability insurance for outpatient medical and senior housing operations[81]. Regulatory Environment - The company is subject to extensive healthcare laws and regulations, which could impact its operations and financial condition[88]. - The company’s revenue sources include governmental healthcare programs like Medicare and Medicaid, which are subject to frequent changes in reimbursement rates[95]. - The company operates senior housing communities in Canada and the UK, which are subject to various provincial regulations and licensing requirements[104]. - In Canada, senior living residences may be government-funded or private-pay, with regulations varying by province[104]. - The UK operations are regulated under the Health and Social Care Act 2008, with potential fines for data protection violations reaching up to 4% of annual worldwide turnover or £17.5 million[105]. - Tenants conducting life sciences research face high levels of regulation and uncertainty, impacting their operational costs and funding sources[106]. - The company is subject to U.S. federal corporate income taxes unless it qualifies as a REIT, which it has maintained since 1999[109]. - Non-U.S. operations in Canada and the UK incur tax expenses, which may increase due to changes in tax laws[110]. - Environmental regulations impose potential liabilities for hazardous substance remediation, which could exceed property values[116]. - The company has indemnification rights under leases and loans for contamination caused by tenants[117]. - The company may also indemnify managers and tenants against environmental claims arising from conditions prior to lease commencement[118]. - The company is monitoring state and federal legislative changes regarding data privacy and cybersecurity, which may impact operational practices and costs[103]. Development Projects - The company has three active and committed development projects as of December 31, 2024, aimed at maximizing value and increasing NOI[61]. COVID-19 Response - The company applied for and received grants under various government programs in response to the COVID-19 pandemic, including the CARES Act[97].

2024 Earnings & 2025 Outlook Earnings Presentation Non-GAAP Financial Measures & Cautionary Statements Non-GAAP Financial Measures This presentation of Ventas, Inc. (the "Company," "we," "us," "our" and similar terms) includes certain financial performance measures not defined by generally accepted accounting principles in the United States ("GAAP"), such as Nareit FFO, Normalized FFO, Net Operating Income ("NOI"), Same-Store Cash NOI, Same-Store Cash NOI Margin, Same-Store Cash NOI Growth and Net Debt to F ...

Financial Data and Key Metrics Changes - Ventas delivered full year normalized FFO per share of $3.19, exceeding the high end of guidance range, representing a 7% year-over-year increase [12][44] - Total company same-store cash NOI grew nearly 8% year-over-year in 2024, with shop same-store cash NOI growth of 16% [45][49] - The company ended 2024 with a net debt to EBITDA ratio of 6.0 times, a 90 basis point improvement year-over-year, entering the long-term target leverage range of 5 to 6 times [47] Business Line Data and Key Metrics Changes - Senior housing NOI growth was significant, with same-store cash NOI growing nearly 16%, marking the third consecutive year of double-digit growth [13][45] - The outpatient medical and research business delivered continued compounding growth of 3% in 2024, with research growing 4.6% and outpatient medical increasing 2.6% [45] - The Ventas Investment Management platform (VIM) has over $5 billion in assets under management, contributing to the overall growth strategy [16] Market Data and Key Metrics Changes - The U.S. senior population aged 80 and above is projected to grow by 28% over the next five years, driving significant demand for senior housing [26] - New construction in senior housing markets remains constrained, with inventory growth at historic lows and new construction starts at an all-time low [27] - Approximately 25% of the portfolio is currently below 80% occupancy, indicating substantial growth potential [102] Company Strategy and Development Direction - The company plans to continue driving shop growth and expand its footprint with accretive investments focused on senior housing, expecting shop business to represent over 50% of NOI by year-end 2025 [17][18] - Ventas aims to maintain its competitive advantages through data analytics, operator relationships, and an experienced team, positioning itself well for future growth [28][41] - The company is focused on executing a community refresh program, improving living and working environments to enhance competitive positioning [29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2025, anticipating normalized FFO per share growth of 7% at the midpoint, driven by shop growth [18][48] - The company highlighted favorable conditions for continued success, including compelling secular demand and a favorable pricing environment [20][21] - Management noted that the current labor market for operators has been favorable, with strong hiring and retention [136] Other Important Information - Ventas completed over $2 billion in accretive investments focused on senior housing in 2024, selected from a larger pipeline of opportunities [14][36] - The company raised $2.2 billion in total equity in 2024, with $250 million of unsettled forward equity available for 2025 investments [46] - The company expects to recycle $200 million through capital recycling efforts, primarily from the sale of skilled nursing facilities [92] Q&A Session Summary Question: What is the trajectory for the medical office building side? - Management indicated that they had 15% more leasing than the prior year and expect occupancy gains in 2025 [58] Question: What is Ventas OI telling you about capitalizing on demographic tailwinds? - Management emphasized the importance of data analytics in making investment decisions and ensuring sustained growth opportunities [62] Question: Can you discuss the acquisition strategy targeting stabilized assets? - Management highlighted the unique opportunity to invest in high-quality assets with a combination of yield and growth, maintaining strict investment criteria [68] Question: What does the deal flow look like compared to last year? - Management noted that the pipeline is larger than last year, with increased activity and competition in the market [78] Question: What are the risks around NIH funding changes? - Management expressed confidence in the long-term prospects of biomedical research in the U.S., despite some noise around NIH grants [90] Question: Can you clarify the seasonal pattern in your guidance for 2025? - Management confirmed that they are using historical seasonality in their underwriting for 2025 [100] Question: What percentage of the portfolio is below 80% occupancy? - Management stated that about 25% of the portfolio is below 80% occupancy, indicating growth potential [102] Question: What is the outlook for capital expenditures? - Management expects capital expenditures to continue at a higher level due to increased volume from acquisitions and conversions [144]