), a health care real estate investment trust (REIT), received a
rating upgrade from Moody's Investors Service, the rating unit of
). The company now enjoys a senior unsecured debt rating of Baa1
that was raised from Baa2, with a stable outlook.
CHESAPEAKE LODG (CHSP): Free Stock Analysis
WINTHROP REALTY (FUR): Free Stock Analysis
MOODYS CORP (MCO): Free Stock Analysis Report
VENTAS INC (VTR): Free Stock Analysis Report
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The uptick in the rating came on the back of Ventas's substantial
increase in unencumbered assets, adherence to a conservative
balance sheet as well as operational strength. Moreover, the
rating agency acknowledged the company's capacity to enhance its
market position and simultaneously sustain a sound liquidity.
The rating upgrade of Ventas is encouraging. In fact, this plays
a major role in preserving investor confidence in the stock and
helps boost its creditworthiness in the market.
In July, Ventas reported second-quarter 2013 normalized funds
from operations (FFO) per share of $1.01 that rose 6.3% year over
year from 95 cents. Total revenue during the quarter reached
$685.8 million, escalating 12.1% year over year.
Ventas' results benefited from the strategic investments made in
2012. In particular, the company experienced an increase in net
operating income in its private pay seniors housing communities,
triple-net lease portfolio and medical office building segment.
Ventas has raised its outlook for full-year 2013, backed by its
solid business model, strategic efforts and accretive
We believe that going forward, the company's diversified
portfolio, strategic acquisitions and decent balance sheet would
provide the tempo for riding on the growth trajectory. Yet, a
large portion of its revenue originates from a few tenants, which
exposes it to concentration risk.
Ventas currently has a Zacks Rank #3 (Hold). The other REITs that
are performing well and deserve a look include
Chesapeake Lodging Trust
Winthrop Realty Trust
), both carrying a Zacks Rank #1 (strong Buy).
FFO, a widely used metric to gauge the performance of REITs,
is obtained after adding depreciation and amortization and other
non-cash expenses to net income.