Sabra Health Care REIT, Inc. (NASDAQ: SBRA)

Sector: Real Estate Industry: REIT - Healthcare Facilities CIK: 0001492298
Market Cap 1.27 Bn
P/B 1.26
P/E 37.44
P/S 5.18
ROIC (Qtr) 4.66
Div Yield % 9.32
Rev 1y % (Qtr) 16.21
Total Debt (Qtr) 2.53 Bn
Debt/Equity (Qtr) 0.90
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About

Sabra Health Care REIT, Inc. (SBRA) is a real estate investment trust (REIT) that operates in the healthcare industry. The company's primary business involves acquiring, financing, and owning real estate properties that are leased to third-party tenants in the healthcare sector. Sabra's investment portfolio is diversified across the United States and Canada, with a focus on skilled nursing and transitional care facilities, senior housing communities, behavioral health facilities, and specialty hospitals. Sabra generates revenue through the leasing...

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Investment thesis

Bull case

  • Operating cash flow of 348.61M provides strong 30.69x coverage of stock compensation 11.36M, indicating sustainable incentive practices.
  • Strong operating cash flow of 348.61M provides 6.49x coverage of SG&A expenses 53.71M, showing efficient operational cost management.
  • Strong free cash flow of (57.20M) provides 46.10x coverage of acquisition spending (1.24M), indicating disciplined M&A strategy.
  • Operating cash flow of 348.61M exceeds receivables of 111.29M by 3.13x, demonstrating excellent collection efficiency.
  • Strong tangible asset base of 5.43B provides 83.10x coverage of intangibles 65.32M, indicating robust asset quality.

Bear case

  • Operating cash flow of 348.61M barely covers its investment activities of (377.96M), with a coverage ratio of -0.92, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 348.61M provides thin coverage of dividend payments of (289.50M) with a -1.20 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 78.14M provide limited coverage of acquisition spending of (1.24M), which is -62.97x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Free cash flow of (57.20M) provides weak coverage of capital expenditures of 405.82M, with a -0.14 ratio suggesting additional external financing needs for growth initiatives.
  • Free cash flow of (57.20M) represents just -0.57x of debt issuance 100.43M, suggesting concerning reliance on leverage rather than internal cash generation for growth.

Consolidation Items Breakdown of Revenue (2017)

Consolidation Items Breakdown of Revenue (2017)

Peer comparison

Companies in the REIT - Healthcare Facilities
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 WELL Welltower Inc. 143.17 Bn 152.82 13.21 21.38 Bn
2 VTR Ventas, Inc. 38.32 Bn 152.44 6.57 13.22 Bn
3 OHI Omega Healthcare Investors Inc 9.79 Bn 37.42 11.00 4.26 Bn
4 DOC Healthpeak Properties, Inc. 9.29 Bn 18.52 5.20 10.14 Bn
5 CTRE CareTrust REIT, Inc. 8.40 Bn 26.19 17.62 0.89 Bn
6 AHR American Healthcare REIT, Inc. 6.95 Bn -212.00 3.23 1.70 Bn
7 HR Healthcare Realty Trust Inc 6.42 Bn -26.10 5.44 4.15 Bn
8 NHI National Health Investors Inc 2.58 Bn 24.34 21.93 1.11 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.48 1.24
EV to Cash from Ops. EV/CFO 21.90 24.29
EV to Debt EV to Debt 1.05 3.18
EV to EBIT EV/EBIT 24.74 14.77
EV to EBITDA EV/EBITDA 15.00 19.20
EV to Free Cash Flow [EV/FCF] EV/FCF -7.73 1.78
EV to Market Cap EV to Market Cap 2.08 1.96
EV to Revenue EV/Rev 10.79 11.43
Price to Book Value [P/B] P/B 1.26 2.64
Price to Earnings [P/E] P/E 37.44 29.39
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.54 -1.90
Dividend Payout Ratio % Div Payout % (Qtr) 187.50 299.46
Dividend per Basic Share Div per Share (Qtr) 1.20 1.85
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -506.33 49.00
Interest Coverage Int. cover (Qtr) 2.40 2.08
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -326.53 -326.40
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 17.79 31.24
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 12.81
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 10.66 35.66
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 8.56 12.40
EBIT Growth (1y) % EBIT 1y % (Qtr) 11.09 25.81
EBT Growth (1y) % EBT 1y % (Qtr) 23.28 71.96
EPS Growth (1y) % EPS 1y % (Qtr) 18.52 29.36
FCF Growth (1y) % FCF 1y % (Qtr) -126.56 -181.35
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 10.15 13.29
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.14 0.17
Cash Payout Ratio Cash Payout (Qtr) 0.38 0.07
Cash Ratio Cash Ratio (Qtr) 0.00 0.00
Current Ratio Curr Ratio (Qtr) 0.00 0.00
Debt to Equity Ratio Debt/Equity (Qtr) 0.90 4.36
Interest Cover Ratio Int Coverage (Qtr) 2.40 2.08
Times Interest Earned Times Interest Earned (Qtr) 2.40 2.08
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 59.00 55.93
EBIT Margin % EBIT Margin % (Qtr) 34.85 28.99
EBT Margin % EBT Margin % (Qtr) 20.33 13.55
Gross Margin % Gross Margin % (Qtr) 100.00 71.26
Net Profit Margin % Net Margin % (Qtr) 20.10 13.18