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Stock of the Week: Ventas

A customer base set to nearly double – are you surprised it’s senior housing?

Andrew Willis 4 October, 2021 | 7:04AM
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Andrew Willis: Senior and assisted living investments haven’t exactly been the apple of investors’ eyes lately. It’s hard to improve occupancy when entire facilities are under quarantine…

But among the industries posed to make a comeback, senior housing is set to benefit from a massive spike in demand that could provide a decade or more of strong growth ahead.

Equity analyst Kevin Brown says that the 80-plus age demographic – which spends more than four times on healthcare per capita than the national average in the U.S. – is set to almost double in size over the next ten years. Ventas is well-positioned on the real estate side of the industry, in the U.S., Canada and the U.K.

Now it’s worth noting that there are few moats in this industry – it’s not that difficult to build senior housing - but post-pandemic, from the healthcare side of things, we’re going to see an increased focus on higher-quality care in lower-cost settings – which can be outside of big hospitals. Propelled by policy like the Affordable Care Act, future business is set to be funnelled to the most efficient venues providing services in senior housing, medical office buildings, life science and outpatient centers…

And Ventas owns many of the right places, right now. But at the end of the day, a healthcare system post-pandemic that sees more of us outside of hospitals might be worth investing in.

For Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Ventas Inc42.37 USD1.63Rating

About Author

Andrew Willis

Andrew Willis  Senior Editor at Morningstar.ca. Follow him on Twitter @AndrewWillisCDN.


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