On Mar 27, 2014, we issued an updated research report on the
retail real estate investment trust (REIT) -
Kimco Realty Corporation
On Feb 5, Kimco reported fourth-quarter 2013 adjusted FFO per
share of 33 cents, in line with the Zacks Consensus Estimate and
the year-ago quarter figure. The flat results were primarily due
to the shedding of the American Industries industrial portfolio
investments and divestiture of the InTown Suites extended stay
portfolio in 2013.
Going forward, we believe that Kimco's efforts to improve its
core portfolio through divestiture of non-strategic and
non-retail assets as well as acquisition of high-quality
properties would help it to ride on the growth trajectory. In
addition, a significant redevelopment pipeline is encouraging as
the properties are positioned in high-income, high-growth areas.
Moreover, the high credit tenant retention limits the downside
risk and provides a long-term steady source of income for the
Although the portfolio restructuring looks promising going
forward, high disposition activity tends to dilute earnings in
the near term and a significant redevelopment pipeline increases
operational risks. Furthermore, rising online sales that
adversely affect the demand for retail space remains a concern
and an anticipated increase in interest rate may dent its
financial results, going forward.
Over the last 30 days, the Zacks Consensus Estimate for 2014
FFO per share moved south by a penny to $1.38. However, it
remained stable at $1.47 for 2015 FFO per share. Consequently,
the stock currently has a Zacks Rank #3 (Hold).
Stocks That Warrant a Look
Better-ranked stocks in the retail REIT industry include
General Growth Properties, Inc
Federal Realty Investment Trust
Simon Property Group Inc.
). All these stocks carry the 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.
FED RLTY INV (FRT): Free Stock Analysis
GENL GRWTH PPTY (GGP): Free Stock Analysis
KIMCO REALTY CO (KIM): Free Stock Analysis
SIMON PROPERTY (SPG): Free Stock Analysis
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