On Jun 18, 2014, we issued an updated research report on the
retail real estate investment trust (REIT) -
Kimco Realty Corporation
On May 7, Kimco reported first-quarter 2014 adjusted FFO per
share of 34 cents, in line with the Zacks Consensus Estimate and up
6.3% year over year. Growth in revenues, occupancy levels and
significant leasing activity were the positives.
Going forward, we believe that Kimco's efforts to improve its
core portfolio through the 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. Recently, Kimco
divested a 4-property portfolio in Mexico for a gross sales price
of 1.1 billion Mexican pesos (US $82.1 million) and reaped around
688.1 million Mexican pesos (US $53.3 million) as pro-rata
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 steady long-term source of income for the
Although this portfolio transformation activity looks promising
going forward, high disposition activity tends to dilute earnings
in the near term and a huge 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 the interest rate may dent the financial
results, going forward.
Over the last 30 days, the Zacks Consensus Estimate for 2014 and
2015 FFO per share remained stable at $1.38 and $1.46,
respectively. The stock currently has a Zacks Rank #3 (Hold).
Stocks That Warrant a Look
Better-ranked stocks in the REIT industry include
Retail Properties of America, Inc.
Rouse Properties, Inc.
Chambers Street Properties
). All these stocks carry 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.
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KIMCO REALTY CO (KIM): Free Stock Analysis
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