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W. P. Carey (WPC) Receives Ratings Upgrade From S&P Global
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W. P. Carey Inc. (WPC - Free Report) recently announced that the issuer credit rating and the issue-level rating on its unsecured notes have been upgraded to BBB+, with a stable outlook, from BBB, with a positive outlook, by S&P Global Ratings (“S&P”).
The rating agency acknowledged W.P. Carey’s large well-diversified portfolio and leverage neutral approach to funding external growth, particularly its stability and quality of the cash flow streams, as the main factors behind the ratings upgrade.
In addition, S&P highlighted WPC’s several competitive advantages to peers, including the company’s inflation-based rent escalators and overweight to property types that are expected to outperform in a recessionary environment.
Per Jason Fox, chief executive officer of W. P. Carey, “We are pleased to learn that S&P has upgraded W. P. Carey to BBB+, reflecting the quality of our portfolio and sound approach to capital management, as well as highlighting our unique attributes within net lease.”
WPC has an encouraging portfolio mix and draws most of its revenues from industrial, warehouse and self-storage properties. As of Sep 30, 2022, W. P. Carey's portfolio included 1,428 net lease properties encompassing around 175 million square feet and a portfolio of 84 self-storage operating properties.
The ratings upgrade will likely boost WPC’s creditworthiness in the market and in all likelihood, intensify investors' confidence in the stock. Such encouraging moves allow the company to enjoy favorable costs on debts and solid access to capital.
The company maintains a healthy balance sheet with ample liquidity. As of Sep 30, 2022, it had $186.4 million of cash and cash equivalents and approximately $1.3 billion of available capacity under its unsecured revolving credit facility. Its pro rata net debt to adjusted EBITDA (annualized) was 5.6X as of the same date.
Shares of WPC have gained 14.4% in the past three months compared with the industry’s growth of 8.9%.
However, analysts seem bearish on the Zacks Rank #4 (Sell) company. The Zacks Consensus Estimate for its 2022 funds from operations (FFO) per share does not indicate a favorable outlook for the company as it has been unchanged in the past month.
The Zacks Consensus Estimate for VICI Properties’ current-year FFO per share is pegged at $1.92.
The Zacks Consensus Estimate for Alexandria Real Estate’s 2022 FFO per share stands at $8.41.
The Zacks Consensus Estimate for Stag Industrial’s ongoing year’s FFO per share is pegged at $2.21.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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W. P. Carey (WPC) Receives Ratings Upgrade From S&P Global
W. P. Carey Inc. (WPC - Free Report) recently announced that the issuer credit rating and the issue-level rating on its unsecured notes have been upgraded to BBB+, with a stable outlook, from BBB, with a positive outlook, by S&P Global Ratings (“S&P”).
The rating agency acknowledged W.P. Carey’s large well-diversified portfolio and leverage neutral approach to funding external growth, particularly its stability and quality of the cash flow streams, as the main factors behind the ratings upgrade.
In addition, S&P highlighted WPC’s several competitive advantages to peers, including the company’s inflation-based rent escalators and overweight to property types that are expected to outperform in a recessionary environment.
Per Jason Fox, chief executive officer of W. P. Carey, “We are pleased to learn that S&P has upgraded W. P. Carey to BBB+, reflecting the quality of our portfolio and sound approach to capital management, as well as highlighting our unique attributes within net lease.”
WPC has an encouraging portfolio mix and draws most of its revenues from industrial, warehouse and self-storage properties. As of Sep 30, 2022, W. P. Carey's portfolio included 1,428 net lease properties encompassing around 175 million square feet and a portfolio of 84 self-storage operating properties.
The ratings upgrade will likely boost WPC’s creditworthiness in the market and in all likelihood, intensify investors' confidence in the stock. Such encouraging moves allow the company to enjoy favorable costs on debts and solid access to capital.
The company maintains a healthy balance sheet with ample liquidity. As of Sep 30, 2022, it had $186.4 million of cash and cash equivalents and approximately $1.3 billion of available capacity under its unsecured revolving credit facility. Its pro rata net debt to adjusted EBITDA (annualized) was 5.6X as of the same date.
Shares of WPC have gained 14.4% in the past three months compared with the industry’s growth of 8.9%.
However, analysts seem bearish on the Zacks Rank #4 (Sell) company. The Zacks Consensus Estimate for its 2022 funds from operations (FFO) per share does not indicate a favorable outlook for the company as it has been unchanged in the past month.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are VICI Properties (VICI - Free Report) , Alexandria Real Estate Equities (ARE - Free Report) and Stag Industrial (STAG - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for VICI Properties’ current-year FFO per share is pegged at $1.92.
The Zacks Consensus Estimate for Alexandria Real Estate’s 2022 FFO per share stands at $8.41.
The Zacks Consensus Estimate for Stag Industrial’s ongoing year’s FFO per share is pegged at $2.21.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.