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TheStreet Open House

Visions of Ventas' Dividends Dancing in My Head

NEW YORK (TheStreet) -- It's just two weeks from Christmas and Santa has already started delivering presents early to REIT-dom, starting with Ventas (VTR - Get Report).

Thanks in large part to the naughty REIT exchange-traded funds, many of the blue Chip REITs have fallen out of favor leaving the smaller retail investors scrambling.

It's no secret that many of the REIT EITs have exposure to major REIT holdings including Simon Property Group (SPG), Public Storage (PSA), American Tower (AMT) and Ventas. However, value investors should not always follow "the crowd" especially when the strategy is less speculative than the facts indicate.

Sometimes Mr. Market can appear to be like the Grinch and cause fear in an effort to "sway what others think or how the world is feeling that day or anything of the sort." That's why it's critical to stay focused and remember that "you are neither right nor wrong because the crowd disagrees with you. You are right because the data and reasoning are right."

So as Mr. Market has moved many REIT investors to panic, savvy investors can still take advantage of the selling and look for some kind of buffer to protect against market fluctuations. That buffer -- the margin of safety -- is the difference between the real or intrinsic value of the business underlying the security and the price assigned to that security at the moment.

Ventas Is a Blue-Chip Bargain

I often write about the "sleep well at night" REITs and I even have a portfolio in my newsletter called the SWAN portfolio. The true meaning for "sleeping well at night" is also defined by Benjamin Graham as a "favorable difference between price on the one hand and indicated or appraised value on the other."

One of my favorite REITs today is Ventas, a diversified health care REIT with a market cap of nearly $17 billion. The advantages for owing shares in Ventas have become increasingly evident as the price has declined considerably over the last few weeks. Although the Grinch was hoping to steal Christmas for Ventas, investors have now less to fear and much more to gain.

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