) reached a new 52-week high, touching $27.11 during the trading
session on May 9 after gaining momentum on decent first quarter
2014 results. The closing price of $27.07 of this residential real
estate investment trust (REIT) reflected a strong year-to-date
return of 18.7%. The trading volume for the session was around 1.7
Despite its strong price appreciation, this Zacks Rank #3 (Hold),
stock has plenty of upside left, given its long-term expected
growth rate of 6.3%.
On Apr 29, UDR reported first-quarter 2014 funds from operations
(FFO) as adjusted of 36 cents per share, which surpassed the Zacks
Consensus Estimate by a penny and the year-ago quarter figure by 2
cents. Results were driven by higher revenues, same-store net
operating income and notable portfolio restructuring activity.
Going forward, we believe that the ongoing extensive development
and redevelopment activities position the company well in upscale
markets and provide notable growth prospects. Moreover, giving us
confidence is the recent analysis by the commercial real estate
CBRE Group, Inc.
). The study revealed that national apartment demand is currently
growing at a stronger pace (over 220,000 units or 1.6% on an annual
basis) than what the market has observed historically.
Over the last 30 days, the Zacks Consensus Estimate for full-year
2014 FFO per share have moved up a cent to $1.50 while that for
2015 remained stable at $1.60.
Other Stocks to Consider
In addition to UDR, two other REITs also scaled 52-week highs on
May 9. The stocks are
Boston Properties Inc.
Vornado Realty Trust
Funds from operations, a widely accepted and reported measure
of REITs performance, are derived by adding depreciation,
amortization and other non-cash expenses to net income.
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