Aging Population Should Power This REIT

A famous proverb, often attributed to Benjamin Franklin, states that nothing in life is certain but death and taxes.

And while that may be true, it hasn’t stopped humankind from working to delay each person’s final moments as long as possible. The result, of course, is that more and more people are living to advanced ages.

Meanwhile, the Baby Boomers – the largest generation in American history until recently – are joining the 65 and older population in great numbers.

The portion of the U.S. population over age 65 is 17.5% today… and that number is expected to rise substantially in the next 30 years. In fact, by 2045, slightly more than a quarter of all Americans will have entered that demographic.

That’s a powerful trend… and one company in particular has made several shrewd moves in April that should help it outperform going forward.

Addition by Subtraction

Ventas, Inc. (VTR) is a healthcare real estate investment trust (REIT) with a diversified portfolio of over 1,600 seniors housing and healthcare properties in the United States, Canada, and the United Kingdom.

It’s an intriguing company that has outperformed both the S&P 500 and the MSCI US REIT Index (RMZ) for more than a decade while providing compound annual dividend growth of 9% – not to mention that its current dividend yield is a very nice 4.33%.

And recently, on April 6, Ventas announced two moves that should provide a significant step toward continued outperformance.

By mid-year, Ventas will close a deal to acquire Ardent Health Services, a for-profit hospital company whose network includes 12 acute care hospitals, a rehabilitation hospital, three multi-specialty physician groups, and retail pharmacies.

Ventas ultimately plans to separate the hospital operations from the real estate and sell the operations portion of the business back to Ardent Management. Ventas will maintain a 9.9% stake in the new entity, but otherwise, it’ll simply own the property and collect rent.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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