Franklin Street Properties Corp.
) is a Zacks #1 Rank (Strong Buy) office REIT that has returned
13.8% year to date and offers a healthy dividend yield of 7.1%.
Furthermore, a forward P/E multiple of 11.35 and an impressive P/B
multiple of 1.02 offer a promising value proposition to investors
Strong Third Quarter
Franklin Street Properties reported solid third quarter results on
October 30, with a 21.5% year-over-year growth in total revenues to
$41.8 million thanks to the incremental impact of accretive
acquisitions. Increased leasing activities during the quarter
resulted in strong occupancy levels of 89.9%. With a suburban
office portfolio where rental rates and occupancy remained fairly
steady, the company expects to continue its growth momentum in the
coming quarters as well.
Funds from operations (FFO) came in at $19.9 million, surpassing
the year-ago tally by 21.3%. On a per share basis, FFO for the
quarter was 24 cents, compared to 20 cents in the prior-year
quarter and exceeding the Zacks Consensus Estimate by 4.4%.
Franklin Street Properties paid a dividend of 19 cents per share in
the third quarter of 2012, which affirms a robust yield of 7.1%.
Rise in Earnings Momentum
Analysts have revised their earnings estimates upward for both 2012
and 2013. Over the past 30 days, the Zacks Consensus Estimate for
2012 increased 2.2% to 95 cents, implying a year-over-year spike of
9.2%. For 2013, the Zacks Consensus Estimate has advanced 7.4% to
$1.01 over the same time period, representing a year-over-year rise
Although shares of Franklin Street Properties nosedived in late
2011, it recovered to a growth trajectory by early this year.
Franklin Street Properties looks undervalued with a forward P/E
multiple of 11.35 and a P/B multiple of 1.02.
Headquartered in Wakefield, Massachusetts, Franklin Street
Properties primarily operates a portfolio of suburban office
buildings, in addition to making select investments in central
business district (CBD) properties and offering loans secured by
mortgages on real estate assets. While its real estate operations
include property acquisitions and disposals, secured financing,
leasing, development and asset management services, its investment
management subsidiary is involved in the structuring of real estate
investments and broker/dealer services. Since its inception in
1997, Franklin Street Properties has deployed a disciplined
approach to real estate property investments that reflect the
inherent high quality of its asset class within the broader capital
markets. The company currently has a market cap of $916.5 million.
Want More of Our Best Recommendations?
Zacks' Executive VP, Steve Reitmeister, knows when key trades are
about to be triggered and which of our experts has the hottest
hand. Then each week he hand-selects the most compelling trades and
serves them up to you in a new program called
FRANKLIN ST PPT (FSP): Free Stock Analysis
To read this article on Zacks.com click here.