Should You Buy Ventas Stock Before Earnings?

by Rob Otman
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Ventas (NYSE: VTR) is a $20 billion company today. Investors that bought shares one year ago are sitting on a -4.81% total return. That's below the S&P 500's return of 26.4%.

Ventas stock is underperforming the market. It's beaten down, but it reports earnings soon. So is it a good time to buy? To answer this question we've turned to the Investment U Stock Grader. Our research team built this system to diagnose the financial health of a company.

Our system looks at six key metrics...

Earnings-per-Share (EPS) Growth: Ventas reported a recent EPS growth rate of 2.33%. That's below the REIT industry average of 17.97%. That's not a good sign. We like to see companies that have higher earnings growth.

Price-to-Earnings (P/E): The average price-to-earnings ratio of the REIT industry is 56.94. And Ventas’ ratio comes in at 32.65. It's trading at a better value than many of its competitors.

Debt-to-Equity The debt-to-equity ratio for Ventas stock is 104.14%. That's above the REIT industry average of 93.53%. That's not a good sign.

Free Cash Flow per Share Growth Ventas has decreased its FCF per share over the last year. That's not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth.

Profit Margins The profit margin of Ventas comes in at 68.22% today. And generally, the higher, the better. We also like to see this ratio above competitors. Ventas’ profit margin is above the REIT average of 54.07%. So that's a positive indicator for investors.

Return on Equity Return on equity gives us a look at the amount of net income returned to shareholders. The ROE for Ventas is 11.04% and that's above its industry average ROE of 10.09%.

Ventas stock passes three of our six key metrics today. That's why our Investment U Stock Grader gives it a Hold.

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Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That's why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.

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