Tags: Brookdale Senior Living | BKD | baby boomers | stocks

Brookdale Senior Living: Demographer’s Delight

By    |   Friday, 17 Jun 2011 04:55 PM

Brookdale Senior Living (BKD), the nation’s largest owner and operator of senior living communities, is sitting in a sweet spot. With more and more baby boomers hitting retirement age and many of them holding substantial wealth, Brookdale stands to benefit. The company owns 558 communities in 33 states with capacity for more than 51,000 residents.

It recently agreed to buy Horizon Bay Realty, the country’s ninth-biggest operator of senior living communities. After the takeover, Brookdale will operate approximately 648 communities in 36 states with the ability to serve more than 67,000 residents.

If you’re looking for a stock to take advantage of the aging Baby Boomer theme, Brookdale is one you might consider.

The company’s fundamentals are solid. In the first quarter, cash from facility operations rose 13.5 percent to $61.8 million from $54.4 million a year earlier. Revenue climbed 4.6 percent to $569.4 million.

More good numbers

Earnings before interest, taxes, depreciations and amortization (EBITDA) gained 6.7 percent to $102.8 million. EBITDA is a common measure of earnings for companies with major capital expenses, who, like Brookdale, generally report net losses.

Brookdale’s average occupancy rate hit 87.2 percent in the first quarter, up from 86.6 percent a year earlier. Average monthly revenue per unit increased 5.1 percent to $4,609.

The only real worry for the company is its debt burden. The company has borrowed money to finance the acquisitions that have fueled its growth. Long-term debt totaled $2.29 billion as of March 31, but that represents a decline of 8 percent from Dec. 31.

Goldman Sachs analysts recently upgraded their rating on Brookdale shares to buy from neutral. It raised the share price target to $30, which would represent a 30 percent gain from Brookdale’s recent trading levels.

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Brookdale Senior Living (BKD), the nation s largest owner and operator of senior living communities, is sitting in a sweet spot. With more and more baby boomers hitting retirement age and many of them holding substantial wealth, Brookdale stands to benefit. The company owns...
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Friday, 17 Jun 2011 04:55 PM
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