Health Care REIT Inc.
), which operates senior housing and health care real estate,
received a rating upgrade from Standard & Poor's Ratings
Services. The company now enjoys a corporate credit rating to BBB
from BBB- with a stable outlook.
The uptick in rating came on the back of Health Care REIT's
diversified and quality portfolio. Moreover, the rating agency
acknowledged the company's capacity to produce a stable cash flow
as well as improve its credit metrics.
The rating upgrade of Health Care REIT 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 February, Health Care REIT reported fourth-quarter 2012
normalized FFO (funds from operations) of 85 cents per share, in
line with the Zacks Consensus Estimate. Being one of the largest
and oldest healthcare REITs in the U.S, the company boasts a
strong portfolio of senior housing, long-term care and medical
Moreover, the completion of the acquisition of Sunrise Senior
Living facility further boosted the company's high-quality senior
housing portfolio and extended its reach in the
high-barriers-to-entry affluent markets.
Also, the healthcare sector is relatively immune to the downturn
in the economy and provides a steady source of income that
insulates the company from short-term market volatility. Thus, we
expect Health Care REIT to maintain its growth curves through
strategic investments and simultaneously benefit the shareholders
by raising dividends.
Yet, with a large portion of revenues being determined by
government payout rates, forces beyond the company's control
could negatively affect revenue and operator coverage ratios.
However, Health Care REIT currently holds a Zacks Rank #4 (Sell).
Nevertheless, a number of other REITs that are performing better
and are worth a look include
Federal Realty Investment Trust
Simon Property Group Inc.
Cousins Properties Incorporated
), all carrying a Zacks Rank #2 (Buy).
FFO, a widely accepted and reported measure of the
performance of REITs, is derived by adding depreciation,
amortization and other non-cash expenses to net income.
COUSIN PROP INC (CUZ): Free Stock Analysis
FED RLTY INV (FRT): Free Stock Analysis
HEALTH CR REIT (HCN): Free Stock Analysis
SIMON PROPERTY (SPG): Free Stock Analysis
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