This stock has had an amazing run over the last 15 years. It’s soared from $3 to $68. And the next 15 years are probably going to be ever better for it.
I’ve got to tell you though, the shares of the company are probably not any sexy industry where huge returns are common among the winners.
It’s not a tech sector raging success story like Apple or Netflix.
It’s not a hot biotech lottery-ticket-type stock with big risks and potentially enormous rewards.
In fact, it’s much simpler and its success was and is far more predictable than any of the biggest winners over the past few years. And best of all, it’s rise signals the ongoing bull market in an ultra-conservative sector that set to beat the markets for years to come.
How to Make 20 Times Your Money Safely
The stock I’m referring to is Ventas (VTR).
This company is a Real Estate Investment Trust (REIT) focused on the acquisition and management of healthcare real estate properties in the U.S. and Canada.
Ventas is pretty much a regular real estate company that’s focused on health care properties like senior living facilities.
What made Ventas’ business plan unique was that it set out to aggressively acquire healthcare real estate properties and roll them all up into one large company.
The company has executed its growth strategy flawlessly. It has made a significant acquisition of healthcare real estate every year for the last decade with the exception of 2008 for obvious reasons.
This strategy has delivered huge gains to shareholders.
As mentioned above, the stock has gone from a low of $3 a share to more than $68 today.
Now Ventas has more than 1600 senior living facilities and other healthcare properties in it’s portfolio. And with a market value of $22 billion, it’s now one of the largest healthcare real estate owners in the country too.
But while it was growing and delivering huge returns in share price appreciation, it was also able to pay back shareholders steadily increasing cash dividends along the way.
In 2001 Venta quarterly dividend was 22 cents per share. The most recent quarter it paid out 79 cents per share.
That’s an annualized increase in dividends of 9.5% per year and a huge bonus on top of the enormous gains in share price.
That kind of run would normally have investors worried. But here’s the thing. The next few years will probably be even better for Ventas and the entire healthcare real estate sector.
The Next “Boomer” Boom
Odds are Ventas will continue to grow and do well because it’s positioned to benefit from a number of economic, investment, and demographic tailwinds.
As a leader in healthcare real estates, the company was positioned itself perfectly for the rising demand for senior living facilities and other healthcare facilities from the the “Traditional Generation.”
But the next decade will probably be much better than the last decade.
You see, the generation born between 1922 and 1945 -- often called the “Traditional Generation” -- was made up of 51 million people. It’s the generation which has driven a lot of senior living facility and healthcare demand over the last decade.
But if you look at the next generation after that -- the Baby Boomers born between 1946 and 1965 -- you’ll see that demand is about to get even bigger. Much bigger.
The Baby Boom generation has a total population estimate to be around 76 million. That’s a good 50% more than the Traditional Generation. And they’re living longer too.
All told, the generational progression will create even more demand for the services provided in the facilities owned by Ventas and other healthcare real estate owners for years to come.
Those are just demographics. By themselves they would be enough to keep the uptrends in healthcare real estate stocks rising. But there’s another factor which could make these types of real estate even more valuable in the future.
That factor is investment demand.
Right now, and we expect it to increase going forward, investors will get more conservative.
As demand for conservative investments rise, the market value of all conservative investments will rise too.
And the rarest of investments, those which are highly conservative yet also offer strong growth potential, will be the most valuable of all.
Healthcare real estate is one of the few sectors which meets all of those criteria.
That’s why Ventas and a number of other stocks should do exceptionally well in the months and years ahead.
My #1 Healthcare Real Estate Play
Ventas isn’t the only player in healthcare real estate though. It was just one of the fastest growers in the sector.
That debt-fueled growth aspect to the company 15 years on isn’t an asset anymore.
Sure, the aggressive strategy helped it do extremely well. And it will likely still do well. But now if you want an extra measure of safety and higher returns in the sector, there are much better values.
For example, Ventas shares are up 124% in the last decade. Share in another healthcare real estate company, Omega Healthcare Investors (OHI), is up 181%. And Health Care REIT (HCN) is up an impressive 84% over the same time period too.
The best value in the market today, the healthcare real estate play I recently recommended to Advanced Wealth Letter readers, is up only 5% over the same time period.
With underperformance like that, it could rise 50% to 100% and still be just catching up to many of it’s competitors.
But it gets even better.
The examples of healthcare real estate plays shown above pay dividends at a respectable rate between 2% and 4%.
That’s not bad. But it’s not great either.
My top healthcare real estate play currently pays more than 7%.
If you’re looking for safety, growth, income, or all three, the healthcare real estate sector place you should be looking.