Cousins Properties Incorporated
) reported positive funds from operations (FFO) surprise of 11.8%
in first-quarter 2014, driven by a significant rise in revenues. To
be particular, this equity real estate investment trust (REIT)
reported the first quarter 2014 FFO of 19 cents per share, beating
the Zacks Consensus Estimate by 2 cents. FFO also came in better
than the year-ago figure of 11 cents.
Total revenue for the quarter grew more than twofold year over year
to $81.7 million. It also exceeded the Zacks Consensus Estimate of
Quarter in Detail
Total same property revenue edged up 0.8% year over year to $25.4
million while total same property operating expense declined 1.3%
year over year to $10.1 million. As a result, total same property
net operating income (NOI) rose 2.2% year over year to $15.2
In the reported quarter, Cousins Properties inked new leases or
renewed prior ones for 454,000 square feet of office and retail
Portfolio Restructuring Activity
Cousins Properties divested 600 University Park office building at
a price of $19.7 million, which generated a gain of $6.4 million.
Cousins Properties had cash and cash equivalents of $29.1 million
at Mar 2014 end, substantially higher than $6.0 million at the end
of Mar 2013.
In the quarter, Cousins Properties issued 8.7 million common stocks
for net proceeds of $98.6 million.
The company raised the common stock dividend to 7.5 cents per share
from 4.5 cents per share. This 66.7% hike in dividend is sure to
boost the investors' confidence in the stock.
We are encouraged by Cousins Properties' decent first-quarter
results on the back of its strong operating portfolio performance.
Notably, excluding first-quarter 2014, the company has an average
FFO surprise of 5.82% in the trailing four quarters. The company's
portfolio is primarily focused on the high-growth Sun Belt markets,
which due to their long-term demographic trends, is expected to
exhibit above-average job growth. Moreover, the company aims to
shape its business on a simpler platform by specifically targeting
trophy assets and opportunistic investments. This ensures a steady
Cousins Properties currently holds a Zacks Rank #2 (Buy). Investors
interested in equity REITs may also consider stocks like
BioMed Realty Trust Inc.
Chesapeake Lodging Trust
CorEnergy Infrastructure Trust, Inc.
). All these stocks carry the same Zacks Rank as Cousins
Note: 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.
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