On Mar 12, 2014, we issued an updated research report on
), a real estate investment trust (REIT).
On Jan 28, continuing with its winning streak, Boston
Properties reported fourth-quarter 2013 funds from operations
(FFO) per share of $1.29, which exceeded the Zacks Consensus
Estimate by 5 cents and the year-ago quarter figure by 2 cents.
Also, this was ahead of the company's guidance range of
$1.23-$1.25. The better-than-expected performance was driven by a
rise in total revenue that climbed 20.5% year-over-year.
We believe that Boston Properties is well poised for a strong
growth trajectory going forward, given its successful endeavors
to maintain a dominant position in high barrier-to-entry
geographic markets across the U.S. Additionally, the company has
a decent balance sheet with manageable near-term debt
Apart from this, the company remains committed to boost
shareholder's wealth as evident when it declared a special cash
dividend of $2.25 per share during the fourth quarter. Such moves
boost investors' confidence in the stock.
However, Boston Properties has a large development pipeline,
which increases its operational risks by exposing it to rising
construction costs, entitlement delays and lease-up risks. Also,
the company has assets in only four markets of the U.S, which
subjects it to any economic downturn in these markets. Moreover,
with a gradual reduction in the Fed's support, interest rates are
expected to increase, which may in turn hurt the rate-sensitive
business of the company in the long run.
Over the last 30 days, the Zacks Consensus Estimate has
remained stable at $5.32 per share for 2014. However, it dipped
by a penny to $5.76 for 2015. Consequently, the stock currently
has a Zacks Rank #3 (Hold).
Stocks That Warrant a Look
Investors interested in REIT industry may consider stocks like
Cousins Properties Inc.
Health Care REIT, Inc.
). All three stocks have a Zacks Rank #2 (Buy).
FFO, a widely used metric to gauge the performance of REITs,
are obtained after adding depreciation, amortization and other
non-cash expenses to net income.
BOSTON PPTYS (BXP): Free Stock Analysis
COUSIN PROP INC (CUZ): Free Stock Analysis
HEALTH CR REIT (HCN): Free Stock Analysis
PUBLIC STORAGE (PSA): Free Stock Analysis
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