Standard & Poor’s Ratings Services (S&P) has upgraded the corporate credit rating of EPR Properties (EPR) from BB to BB+. The rating agency has also upped the company’s unsecured debt rating to investment grade of BBB- from BB+. Additionally, S&P has given the Kansas City, MO-based retail real estate investment trust (REIT) a stable outlook, which denotes the company’s capability to expand in a leveraged-neutral manner.
EPR Properties’ strong balance sheet and solid rent coverage, driven by a diversified tenant base, might have prompted S&P to upgrade the rating. This upgrade is expected to considerably boost investors’ confidence in the stock.
Notably, EPR Properties is a specialty REIT investing in properties in three primary market segments – Entertainment, Recreation and Education. The company follows a conservative approach in financing the investments geared towards the specialty segments. It sticks to rigorous underwriting standards while simultaneously aiming at offering stable and attractive returns to investors. All these positives might have triggered the rating upgrade of the company.
EPR Properties currently carries a Zacks Rank #4 (Sell). Some better-ranked retail REITs include Acadia Realty Trust (AKR), National Retail Properties, Inc. (NNN) and Regency Centers Corporation (REG). All these stocks hold a Zacks Rank #2 (Buy).
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