Ushering in good news for its shareholders, Jones Lang LaSalle Incorporated (JLL - Free Report) revealed that it received a credit rating upgrade to “BBB” from “BBB-” from the Standard & Poor’s Ratings Services (S&P). Notably, this upgrade comes after the S&P changed its outlook for JLL to positive in Jun 2014 and modified its rating methodology recently.
In fact, in its change of outlook in June, the S&P acknowledged JLL’s vast geographic footprint, well-implemented global growth policy, conservative financial management as well as solid market position. Moreover, with this, the company now enjoys solid investment-grade ratings from both the S&P as well as Moody’s Investors Service (it assigned a Baa2 rating).
In our opinion, the rating upgrade comes as a positive for JLL, enhancing its creditworthiness in the market, and is likely to boost investors’ confidence in the stock. Specifically, rating upgrade gives companies an opportunity to enjoy reduced costs on its debts and better access to capital.
JLL exited the third quarter with cash and cash equivalents of $162.6 million, up from $152.7 million at year-end 2013. Apart from having an investment grade balance sheet, the company enjoys a manageable debt position. Aided by its solid cash generation capabilities, JLL reduced its net debt by $248 million from the year-ago quarter to $517 million.
Moreover, helped by robust growth in fee revenues, JLL’s third-quarter 2014 adjusted earnings per share comfortably exceeded the Zacks Consensus Estimate by nearly 30% and improved from the prior-year quarter figure by 55%. The company has also announced a 9% hike in its semi-annual dividend rate.
JLL currently carries a Zacks Rank #2 (Buy). Investors interested in the Real Estate Operations may also consider stocks like NorthStar Realty Finance Corp. , CBRE Group, Inc. (CBG - Free Report) and Kennedy-Wilson Holdings, Inc. (KW - Free Report) . While NorthStar Realty sports a Zacks Rank #1 (Strong Buy), both CBRE and Kennedy-Wilson Holdings hold the same Zacks Rank as JLL.