PS Business Parks Inc.
) has planned a significant divestiture program for the coming
quarters, with the aim of leaving Portland, Sacramento, and Phoenix
markets. Although this will provide the dry powder for acquiring
well located, underperforming assets at discounts to replacement
costs, its near-term earnings dilution effect cannot be evaded.
The company also came up with lower-than-expected first-quarter
2014 results in April. The company's adjusted FFO per share came in
at $1.22, a penny shy of the Zacks Consensus Estimate as well as
the prior-year quarter figure. This was mainly due to a rise in
share count from the Nov 2013 common share offering. Also, high
snow removal costs added to the woes.
Additionally, Moreover, PS Business Parks' portfolio is not
likely to experience any robust growth in the near term as
currently, persistent office space efficiency trends are continuing
to limit any significant recovery in the office sector
For detailed insight into PS Business Parks, you can refer to
our updated research report, which was issued on Jul 17, 2014.
Echoing similar sentiments, analysts have revised their
estimates in downward direction. The Zacks Consensus Estimate for
FFO per share for 2014 slipped 4.5% to $4.86. Also, for 2015, it
decreased 4.7% to $5.11. Consequently, the stock currently has a
Zacks Rank #5 (Strong Sell).
Stocks That Warrant a Look
Investors interested in the REIT industry may, however, consider
Aviv REIT, Inc.
W. P. Carey Inc.
FelCor Lodging Trust Inc.
). All three stocks have a Zacks Rank #1 (Strong Buy).
FFO, a widely used metric to gauge the performance of REITs, is
obtained after adding depreciation and amortization and other
non-cash expenses to net income.
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PS BUSINESS PKS (PSB): Free Stock Analysis
AVIV REIT INC (AVIV): Free Stock Analysis
FELCOR LODGING (FCH): Free Stock Analysis
WP CAREY INC (WPC): Free Stock Analysis Report
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