Ventas
Richard Band and I don’t agree on every stock that’s out there, but one pick we both share a very bullish view on is Ventas (VTR). Richard recommends this stock in his Profitable Investing newsletter, and I think it’s a great pick for any portfolio.
Ventas controls some 700 senior-housing facilities, 400 skilled-nursing facilities and 250 medical-office buildings across the U.S. This breadth puts VTR in prime position to capitalize on the aging Boomer population that will need an increasing amount of care over the next few years.
But it’s not just a demographics trade. Ventas is also gobbling up smaller competitors, with eight major acquisitions over the past decade that total over $16 billion, in order to ensure future growth. These are also high-quality purchases, with so-called triple-net leases that mean tenants, not Ventas, are obligated to pay for any property-related expenses like taxes, maintenance and insurance.
In addition to the long-term potential, healthcare REITs have a big tailwind in 2014 as investors have gone “risk off” and have piled into stable, dividend stocks. VTR is up about 19% since Jan. 1 to trounce the broader stock market — and on top of that, still yields 4.3% after the run.
