SBRA

Sabra is a healthcare REIT owning skilled-nursing, senior-housing and related facilities. After the COVID era battered the sector — net losses of -$113M (FY2021) and -$77.6M (FY2022) — the recovery is now firmly established: FY2025 revenue grew 25.4% to $357M and net income rose 22.8% to $156M ($0.64 diluted EPS, +18.5%), the third straight year of improving profitability. As a REIT, GAAP EPS understates the economics because depreciation is a large non-cash charge ($187M); operating cash flow of $349M (+12.3%) is the better measure and comfortably covers the $289M dividend (+3.3%), so the headline 28.3x P/E and the related P/S are misleading lenses for this property business.

The balance sheet is reasonable for a REIT, with liabilities/equity of 0.95x and $2.53B of long-term debt against $2.82B of equity, plus $71.5M of cash. The portfolio benefits from a powerful secular tailwind — the aging of the population driving demand for skilled nursing and senior housing — though the filing is candid about the model's vulnerabilities: rising interest rates 'could increase our interest costs' and limit refinancing, inflation can outpace rental escalators (especially in the managed senior-housing portfolio where Sabra 'bear[s] the impact of any increases in costs of labor'), and a future pandemic could again impair tenant rent and debt-service payments and even force a dividend cut.