DB:SBC

Stock Analysis Report

Sabra Health Care REIT

Executive Summary

As of September 30, 2019, Sabra’s investment portfolio included 434 real estate properties held for investment (consisting of (i) 304 Skilled Nursing/Transitional Care facilities, (ii) 62 Senior Housing communities (“Senior Housing - Leased”), (iii) 44 Senior Housing communities operated by third-party property managers pursuant to property management agreements (“Senior Housing - Managed”) and (iv) 24 Specialty Hospitals and Other facilities), one investment in a direct financing lease, 20 investments in loans receivable (consisting of (i) one mortgage loan, (ii) two construction loans and (iii) 17 other loans), nine preferred equity investments and one investment in an unconsolidated joint venture that owns 170 Senior Housing - Managed communities.

Rewards

Trading at 51.8% below its fair value

Earnings are forecast to grow 26.94% per year

Risk Analysis

Unstable dividend track record

Large one-off items impacting financial results

Profit margins (1.7%) are lower than last year (60.3%)

Shareholders have been diluted in the past year



Snowflake Analysis

Average dividend payer and fair value.


Similar Companies

Share Price & News

How has Sabra Health Care REIT's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SBC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

SBC

1.4%

DE REITs

0.3%

DE Market


1 Year Return

13.6%

SBC

35.6%

DE REITs

13.8%

DE Market

Return vs Industry: SBC underperformed the German REITs industry which returned 32.9% over the past year.

Return vs Market: SBC matched the German Market which returned 14% over the past year.


Shareholder returns

SBCIndustryMarket
7 Day0%1.4%0.3%
30 Day8.2%6.4%1.3%
90 Day-6.8%7.5%5.2%
1 Year24.0%13.6%39.9%35.6%17.4%13.8%
3 Yearn/a42.7%22.5%15.9%5.7%
5 Yearn/a45.5%14.2%27.9%10.6%

Price Volatility Vs. Market

How volatile is Sabra Health Care REIT's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Sabra Health Care REIT undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SBC (€19.27) is trading below our estimate of fair value (€40.01)

Significantly Below Fair Value: SBC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SBC is poor value based on its PE Ratio (403.1x) compared to the REITs industry average (8.9x).

PE vs Market: SBC is poor value based on its PE Ratio (403.1x) compared to the German market (20.6x).


Price to Earnings Growth Ratio

PEG Ratio: SBC is poor value based on its PEG Ratio (15x)


Price to Book Ratio

PB vs Industry: SBC is good value based on its PB Ratio (1.3x) compared to the DE REITs industry average (1.6x).


Next Steps

Future Growth

How is Sabra Health Care REIT forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

27.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SBC's forecast earnings growth (26.9% per year) is above the savings rate (-0.4%).

Earnings vs Market: SBC's earnings (26.9% per year) are forecast to grow faster than the German market (13.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: SBC's revenue (0.08% per year) is forecast to grow slower than the German market (4.8% per year).

High Growth Revenue: SBC's revenue (0.08% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SBC's Return on Equity is forecast to be low in 3 years time (5%).


Next Steps

Past Performance

How has Sabra Health Care REIT performed over the past 5 years?

28.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SBC has a large one-off loss of $93.5M impacting its September 30 2019 financial results.

Growing Profit Margin: SBC's current net profit margins (1.7%) are lower than last year (60.3%).


Past Earnings Growth Analysis

Earnings Trend: SBC's earnings have grown significantly by 28.5% per year over the past 5 years.

Accelerating Growth: SBC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SBC had negative earnings growth (-97.5%) over the past year, making it difficult to compare to the REITs industry average (96.7%).


Return on Equity

High ROE: SBC's Return on Equity (0.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Sabra Health Care REIT's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: SBC has a high level of physical assets or inventory.

Debt Coverage by Assets: SBC's debt is not covered by short term assets (assets are 0.1x debt).


Financial Institutions Analysis

Asset Level: SBC's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if SBC has a sufficient allowance for bad loans.

Low Risk Liabilities: SBC reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if SBC has an acceptable proportion of non-loan assets held.

Low Risk Deposits: SBC has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if SBC has an appropriate level of bad loans.


Next Steps

Dividend

What is Sabra Health Care REIT's current dividend yield, its reliability and sustainability?

8.11%

Current Dividend Yield


Dividend Yield vs Market

company8.1%marketbottom25%1.3%markettop25%3.6%industryaverage2.8%forecastin3Years8.2%

Current dividend yield vs market & industry

Notable Dividend: SBC's dividend (8.25%) is higher than the bottom 25% of dividend payers in the German market (1.38%).

High Dividend: SBC's dividend (8.25%) is in the top 25% of dividend payers in the German market (3.53%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, SBC has been paying a dividend for less than 10 years.

Growing Dividend: SBC's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (93.4%), SBC's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SBC's dividends in 3 years are forecast to be thoroughly covered by earnings (0.5% payout ratio).


Next Steps

Management

What is the CEO of Sabra Health Care REIT's salary, the management and board of directors tenure and is there insider trading?

9.2yrs

Average management tenure


CEO

Rick Matros (65yo)

9.7yrs

Tenure

US$4,675,510

Compensation

Mr. Richard K. Matros, also known as Rick, has been President and Chief Executive Officer and Director at Baylor Scott & White Medical Center - Sunnyvale since May 2010 and has been its Chairman of the Boa ...


CEO Compensation Analysis

Compensation vs Market: Rick's total compensation ($USD4.68M) is above average for companies of similar size in the German market ($USD2.07M).

Compensation vs Earnings: Rick's compensation has been consistent with company performance over the past year.


Management Age and Tenure

9.2yrs

Average Tenure

57yo

Average Age

Experienced Management: SBC's management team is seasoned and experienced (9.2 years average tenure).


Board Age and Tenure

5.8yrs

Average Tenure

62yo

Average Age

Experienced Board: SBC's board of directors are considered experienced (5.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Sell€1,120,70927 Aug 19
Raymond Lewis
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares58,000
Max Price€19.32
Sell€279,72021 Aug 19
Michael Foster
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares15,000
Max Price€18.65

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.1%.


Management Team

  • Rick Matros (65yo)

    Chairman

    • Tenure: 9.7yrs
    • Compensation: US$4.68m
  • Talya Nevo-Hacohen (59yo)

    Executive VP

    • Tenure: 9.2yrs
    • Compensation: US$2.01m
  • Harold Andrews (55yo)

    Executive VP

    • Tenure: 9.2yrs
    • Compensation: US$2.01m
  • Pete Nyland

    Executive Vice President of Asset Management

    • Brent Chappell (54yo)

      Executive VP & Portfolio Manager

      • Tenure: 2.5yrs
    • Michael Costa

      Executive Vice President of Finance


      Board Members

      • Michael Foster (66yo)

        Lead Independent Director

        • Compensation: US$186.50k
      • Ronald Geary (72yo)

        Independent Director

        • Tenure: 2.4yrs
        • Compensation: US$164.00k
      • Rick Matros (65yo)

        Chairman

        • Tenure: 9.7yrs
        • Compensation: US$4.68m
      • Ray Lewis (55yo)

        Independent Director

        • Tenure: 2.4yrs
        • Compensation: US$160.00k
      • Milton Walters (77yo)

        Director

        • Tenure: 9.2yrs
        • Compensation: US$170.00k
      • Jeff Malehorn (57yo)

        Independent Director

        • Tenure: 2.4yrs
        • Compensation: US$162.00k
      • Bob Ettl (59yo)

        Independent Director

        • Tenure: 9.2yrs
        • Compensation: US$188.00k
      • Lynne Katzmann

        Independent Director

        • Tenure: 0.8yrs
      • Craig Barbarosh (51yo)

        Independent Director

        • Tenure: 9.2yrs
        • Compensation: US$194.00k

      Company Information

      Sabra Health Care REIT, Inc.'s company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: Sabra Health Care REIT, Inc.
      • Ticker: SBC
      • Exchange: DB
      • Founded: 2010
      • Industry: Health Care REITs
      • Sector: Real Estate
      • Market Cap: US$4.489b
      • Listing Market Cap: US$4.071b
      • Shares outstanding: 202.32m
      • Website: https://www.sabrahealth.com

      Number of Employees


      Location

      • Sabra Health Care REIT, Inc.
      • 18500 Von Karman Avenue
      • Suite 550
      • Irvine
      • California
      • 92612
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      SBRANasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDNov 2010
      SBCDB (Deutsche Boerse AG)YesCommon StockDEEURNov 2010

      Biography

      As of September 30, 2019, Sabra’s investment portfolio included 434 real estate properties held for investment (consisting of (i) 304 Skilled Nursing/Transitional Care facilities, (ii) 62 Senior Housing communities (“Senior Housing - Leased”), (iii) 44 Senior Housing communities operated by third-party property managers pursuant to property management agreements (“Senior Housing - Managed”) and (iv) 24 Specialty Hospitals and Other facilities), one investment in a direct financing lease, 20 investments in loans receivable (consisting of (i) one mortgage loan, (ii) two construction loans and (iii) 17 other loans), nine preferred equity investments and one investment in an unconsolidated joint venture that owns 170 Senior Housing - Managed communities. As of September 30, 2019, Sabra’s real estate properties held for investment included 43,553 beds/units and its unconsolidated joint venture included 7,538 beds/units, spread across the United States and Canada. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/26 21:46
      End of Day Share Price2020/01/24 00:00
      Earnings2019/09/30
      Annual Earnings2018/12/31


      Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.