All the ratings of Ventas, Inc. (VTR - Free Report) and its subsidiaries have been affirmed by Moody's Investors Service, the rating arm of Moody’s Corporation (MCO - Free Report) . This Chicago, IL-based healthcare real estate investment trust’s (REIT) senior unsecured debt rating is affirmed at Baa1. The rating agency has also maintained the company’s outlook at stable.
Per the rating agency, the move is backed by Ventas’ well-diversified and large portfolio of senior housing and healthcare properties. Further, the company’s concentration on private pay segment restricts it from the unpredictable government settlements. Moody’s believes, due to diverse property types, the company’s cash flows will remain stable.
Moreover, the rating agency cited the company’s healthy liquidity position as a positive factor, which will take care of its growth plans. Ventas also enjoys manageable debt maturity schedule. Further, the company’s liquidity position will be enhanced due to its disposition plans for 2018.
Additionally, the rating agency expects Ventas to continue pursuing growth through strategic moves, which will influence the company’s credit metrics. The same is reflected in the stable rating outlook.
Notably, the latest rating affirmation reinstalls Ventas’ creditworthiness in the market and is likely to boost investors’ confidence in the stock. In fact, such moves provide companies an opportunity to enjoy favorable costs on debts and solid access to capital.
Nonetheless, concentration risks associated with dependence on few tenants, intense competition with national and local operators, and any rise in interest rate are a few concerns before Ventas.
Encouragingly, in the past month, this Zacks Rank #3 (Hold) stock has outperformed the industry. While the company’s shares have gained 11.8%, the industry has recorded growth of 4.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks Worth a Look
A few better-ranked stocks from the same space include Pebblebrook Hotel Trust (PEB - Free Report) and LaSalle Hotel Properties (LHO - Free Report) . Both the stocks carry a Zacks Rank of 1.
Pebblebrook Hotel’s Zacks Consensus Estimate for 2018 FFO per share rose 1.5% to $2.66 over the past month. Its shares have returned 8.5% in the past six months.
LaSalle Hotel’s FFO per share estimates for the current year moved up 5.2% to $2.21 in a month’s time. Its shares have gained 20.9% over the past six months.
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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