Analysts are starting to look at 10 healthcare REITs, but which ones are worth buying?

Analysts are starting to look at 10 healthcare REITs, but which ones are worth buying?

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When an analyst begins coverage on a stock, it means that the analyst will begin researching the stock and making investment recommendations for the first time. This move is important because it usually results in an increase in trading volume and investor interest. It can ultimately help these stocks’ share prices move higher, depending on the ratings given.

Typically, analysts will start with two or three similar stocks at the same time. But every once in a while, analysts start focusing on a larger group within a sub-industry.

This week, January 30, 2024, is one of those, as coverage of ten healthcare real estate investment trusts (REITs) was initiated by a single analyst, but only six of the ten were rated “Buy”.

Sabra Healthcare REIT (Nasdaq: SBRA) is an Irvine, California-based healthcare REIT with 410 properties in the United States, with a portfolio that includes senior care facilities (SNFs), senior housing, behavioral health and Specialty hospital, weighted average lease term (WALT) of eight years). Signature Healthcare is its largest tenant, with a rent concentration of 9%.

Sabra CEO Rick Matros recently told analysts that occupancy growth and easing workforce pressure are driving rental coverage higher and Medicaid reimbursements could increase. Thirteen SNFs and two senior housing facilities were sold in the third quarter of 2023, with net proceeds used to reduce the outstanding balance of Sabra’s revolving credit facility.

On January 30, Deutsche Bank analyst Omotayo Okusanya gave Sabra Health Care a buy rating for the first time and announced a target price of $21. Earlier this month, Mizuho analyst Vikram Malhotra also maintained a buy rating on Sabra Health while raising his price target to $17 from $15.

Sabra Health Care’s total return for 2024 is -5.00%.

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Huerta (NYSE: WELL) is a Toledo, Ohio-based healthcare REIT with interests in seniors housing, post-acute communities and outpatient medical properties. It does this by providing funding to operators who operate these facilities. Welltower was founded in 1970 as Health Care Fund and registered as a REIT in 1985. Welltower is a member of the S&P 500 Index.

Welltower has a 2017 property portfolio that includes senior housing, ambulatory care and long-term/post-acute care throughout the United States. The average age of these facilities is 20 years.

Deutsche Bank analyst Omotayo Okusanya initiated a buy rating on Welltower and announced a target price of $115. Earlier this month, Keybanc analyst Todd Thomas maintained an overweight rating while raising his price target to $95 from $90.

Welltower is one of the 15 best-performing REITs in 2023 with a total return of 39.64%, but its total return so far in 2024 is -3.40%.

Sales company (NYSE: VTR) is a Chicago-based diversified healthcare REIT with approximately 1,400 properties, including senior living communities, life sciences, research and innovation properties, medical office buildings, outpatient facilities and skilled nursing facilities. Ventas has been in business for more than 20 years and is a member of the S&P 500 Index.

Deutsche Bank analyst Omotayo Okusanya initiated a buy rating on Ventas and announced a target price of $60. On January 16, 2023, Bank of America Securities analyst Joshua Dennerlein upgraded Ventas’ rating from “neutral” to “buy” and raised the target price from $48 to $53.

Ventas’ total return in 2024 is -4.90%.

national health investors corp. (NYSE: NHI) is a Murfreesboro, Tennessee-based healthcare REIT that specializes in sale-leasebacks, joint ventures, mortgages and mezzanine financing of senior housing and healthcare investments. Its 192-property portfolio includes independent living, assisted living, memory care communities, skilled nursing facilities, medical office buildings and specialty hospitals. National Health Investors was founded in 1991.

Deutsche Bank analyst Omotayo Okusanya initiated a buy rating on National Health Investors and announced a target price of $6.

National Health Investors’ total return in 2024 is -2.66%.

Omega Healthcare Investors, Inc. (NYSE: OHI) is a triple-net equity healthcare REIT based in Hunt Valley, Maryland, operating 66 of 883 senior housing, skilled nursing and assisted living facilities in 42 states in the United States and the United Kingdom. Different operators provide financing, capital and leasing services. Omega Healthcare Investors are not involved in the day-to-day management of these operator-operated facilities.

Deutsche Bank analyst Omotayo Okusanya initiated a buy rating on Omega Healthcare Investors and announced a price target of $36.

Omega Healthcare’s total return for 2024 is -5.02%.

Three other healthcare REITs, Healthcare REIT (NYSE: HR), LTC Real Estate Company (NYSE: LTC) and Healthpeak Real Estate Company (NYSE:PEAK ) was also initiated into coverage on January 30 and received a Hold rating. The target prices of the three are US$18, US$34 and US$21 respectively.

medical property trust corp. (NYSE: MPW ) shares have fallen 36% in 2024 and are given a Sell rating and a $2 price target.

Healthcare REITs have improved in terms of occupancy and the ability to restructure leases with operators, but not all healthcare REITs have made the same changes, and this is reflected in Okusanya’s various ratings.

Investors should keep in mind that analysts are only correct about 50% of the time and investors would be wise to conduct their own due diligence before making a buy or sell transaction.

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In this article, analysts are starting to look at 10 healthcare REITs, but which ones are worth buying?Originally appeared on Benzinga.com

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