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Highwoods' (HIW) Ratings Affirmed by Moody's: Time to Hold?
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Ushering in good news for Highwoods Properties’ (HIW - Free Report) shareholders, Moody's Investors Service recently affirmed the company’s ratings, including the Baa2 senior unsecured debt rating, with a stable outlook.
Per the rating agency, the move is backed by Highwoods’ well situated, premium-quality portfolio of office properties. The company has assets in major Sunbelt markets which enjoy decent growth in jobs that fuel demand for office space. Also, supply is manageable in these markets and vacancy rates are low.
Moreover, the rating agency cited the company’s adherence to a conservative capital structure. Highwoods resorts to non-core assets disposition, and reinvests the proceeds in strategic acquisitions and development efforts. Such moves helped reap decent cash rental-rate growth over the past four years, according to Moody's. The company also enjoys a healthy liquidity position and manageable debt maturity schedule.
Further, the rating agency expects the company to maintain its conservative capital structure even while pursuing growth through ground-up development and this is reflected in the stable rating outlook.
Notably, the latest rating affirmation reinstalls the company’s 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.
Highwoods has a diverse portfolio and a well-capitalized tenant base. Particularly, the company’s efforts to enhance its office asset portfolio in best business districts (BBDs) through strategic acquisitions position it for long-term growth.
Additionally, the company’s third-quarter 2017 funds from operations (FFO) per share of 86 cents surpassed the Zacks Consensus Estimate by a penny. It also came in higher than the year-ago quarter figure. Results were backed by solid growth in straight-line rental income and improved leasing activity.
However, the company has concentration of assets in Raleigh, Atlanta and Tampa which generates a major portion of its annualized cash revenues. This geographic concentration of properties remains a risk. Rate hike remains another concern.
Highwoods currently has a Zacks Rank #3 (Hold). Nonetheless, its shares have edged down 1.6%, thereby underperforming 2.1% growth recorded by the industry it belongs to, in the past three months.
Cedar Realty’s FFO per share estimates for 2017 increased 1.9% to 54 cents in a week’s time. Its share price has increased 19.5% in the past three months.
Extra Space Storage’s current-year FFO per share estimates inched up 0.5% to $4.33 over the past month. Its shares have rallied 9.8% over the last three months.
Urstadt Biddle Properties’ FFO per share estimates for fiscal 2017 remained unchanged at $1.25in a month. Over the past three months, the company’s shares have gained 14.9%.
Note: All EPS numbers presented in this report represent funds from operations (FFO) per share. 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.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Image: Bigstock
Highwoods' (HIW) Ratings Affirmed by Moody's: Time to Hold?
Ushering in good news for Highwoods Properties’ (HIW - Free Report) shareholders, Moody's Investors Service recently affirmed the company’s ratings, including the Baa2 senior unsecured debt rating, with a stable outlook.
Per the rating agency, the move is backed by Highwoods’ well situated, premium-quality portfolio of office properties. The company has assets in major Sunbelt markets which enjoy decent growth in jobs that fuel demand for office space. Also, supply is manageable in these markets and vacancy rates are low.
Moreover, the rating agency cited the company’s adherence to a conservative capital structure. Highwoods resorts to non-core assets disposition, and reinvests the proceeds in strategic acquisitions and development efforts. Such moves helped reap decent cash rental-rate growth over the past four years, according to Moody's. The company also enjoys a healthy liquidity position and manageable debt maturity schedule.
Further, the rating agency expects the company to maintain its conservative capital structure even while pursuing growth through ground-up development and this is reflected in the stable rating outlook.
Notably, the latest rating affirmation reinstalls the company’s 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.
Highwoods has a diverse portfolio and a well-capitalized tenant base. Particularly, the company’s efforts to enhance its office asset portfolio in best business districts (BBDs) through strategic acquisitions position it for long-term growth.
Additionally, the company’s third-quarter 2017 funds from operations (FFO) per share of 86 cents surpassed the Zacks Consensus Estimate by a penny. It also came in higher than the year-ago quarter figure. Results were backed by solid growth in straight-line rental income and improved leasing activity.
However, the company has concentration of assets in Raleigh, Atlanta and Tampa which generates a major portion of its annualized cash revenues. This geographic concentration of properties remains a risk. Rate hike remains another concern.
Highwoods currently has a Zacks Rank #3 (Hold). Nonetheless, its shares have edged down 1.6%, thereby underperforming 2.1% growth recorded by the industry it belongs to, in the past three months.
Stocks to Consider
Some better-ranked stocks in the REIT space are Cedar Realty Trust , Extra Space Storage (EXR - Free Report) and Urstadt Biddle Properties Inc. . All three stocks carry a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cedar Realty’s FFO per share estimates for 2017 increased 1.9% to 54 cents in a week’s time. Its share price has increased 19.5% in the past three months.
Extra Space Storage’s current-year FFO per share estimates inched up 0.5% to $4.33 over the past month. Its shares have rallied 9.8% over the last three months.
Urstadt Biddle Properties’ FFO per share estimates for fiscal 2017 remained unchanged at $1.25in a month. Over the past three months, the company’s shares have gained 14.9%.
Note: All EPS numbers presented in this report represent funds from operations (FFO) per share. 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.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Click here to see them >>