Janus Living: The Pure Play On Senior Housing Growth

Dane Bowler Investing Group Leader Follow 5 Share Save Play ( 11min ) Comment (1) Summary Janus Living stands as the only pure-play senior housing REIT, offering direct SHOP exposure and unique sector positioning. JAN trades at a lower AFFO multiple than peers, yet its negative net debt and cash hoard suggest a leverage-neutral undervaluation. With $1.67B in cash, JAN is poised for $2.4B+ in accretive acquisitions, targeting 7.5% unlevered returns and rapid AFFO/share growth. Consensus projects 17% annual AFFO/share growth, and JAN's concentrated SHOP portfolio maximizes benefit from sector tailwinds. Looking for a portfolio of ideas like this one? Members of Portfolio Income Solutions get exclusive access to our subscriber-only portfolios. Learn More » Jessie Casson/DigitalVision via Getty Images We believe Janus Living ( JAN ) is the best senior housing play in the REIT space. It has 3 key advantages that set it apart from peers: Pure-play Relatively undervalued Cash hoard The market seems to be valuing JAN as a low-debt company. It is actually a negative debt company, and if one properly accounts for this in a leverage-neutral valuation, JAN’s adjusted multiple is likely too low for a high-growth sector. The Only Pure-Play Welltower ( WELL ) is often touted as the premier example of a senior housing REIT. They were historically a diversified healthcare REIT with a variety of property types. A recent acquisition spree in senior housing has taken them to mostly senior housing, but WELL still has 16% between LTAC and outpatient medical. WELL Additionally, 14% of their NOI is from triple net senior housing, with about 70% of WELL’s portfolio in SHOP which is what the market considers to be the high-growth area of senior housing. SHOP gets even more diluted from there, with other senior housing REITs having lower concentrations. Ventas ( VTR ) is 61% senior housing, of which 56 percentage points are SHOP. VTR National Health Investors ( NHI ) has a pro forma senior ho...