Shares of Regency Centers Corporation REG , a retail real estate investment trust (REIT), have been performing well, of late. In the past month, the stock has gained 2.8%, while the industry incurred a loss of 0.9%.
In fact, the rally might continue in the near term as well, as there are a number of favorable factors.
Regency has been focusing on building a premium portfolio of grocery-anchored shopping centers. Such grocery-centered shopping centers are necessity driven, thus drive a dependable traffic. Making solid progress with this strategy, the company successfully merged with Equity One, creating a high-quality portfolio of 429 properties, mainly grocery-anchored, situated in several top markets for Regency.
These efforts have helped Regency to already realize $27 million of general and administration (G&A) cost synergies. In fact, management anticipates realizing another $27 million of G&A synergies in 2018.
Such strategic acquisitions are anticipated to be accretive to core funds from operations (FFO) per share and, in turn, drive long-term growth.
Furthermore, the company announced an acquisition of 22 acres of land for a 170,000-square-foot shopping center project in Raleigh, NC. With an impressive tenant roster, this hub is expected to enjoy high footfall.
Regency has a debt/equity ratio of 0.53, lower than the industry's average of 1.25. As such, it enjoys high financial flexibility, which supports the company's growth pursuits.
In addition, Regency reported better-than-expected results in the third quarter with respect to FFO per share. The company witnessed robust growth in revenues and same-property net operating income (NOI), as well as stronger leasing activity in its same-property portfolio and small-shops portfolio. In fact, Regency surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an average beat of 4.6%.
With current-year projected sales growth rate of 58.9%, we anticipate robust bottom-line performance as sales growth is usually an indicator of a company's future earnings performance.
Further, the company generates cash flow per share of $3.19 as compared to the industry's average of $2.04. This, along with its impressive sales growth projection, makes us optimistic about Regency's long-term growth.
This Zacks Rank #2 (Buy) stock has also seen the Zacks Consensus Estimate for current-year FFO per share remaining unchanged at $3.67 in a month's time. Given its progress on fundamentals, the stock is likely to keep performing well in the quarters ahead.
Stocks to Consider
Some other to-ranked stocks in the REIT space are Cedar Realty Trust CDR , Urstadt Biddle Properties UBA and DCT Industrial Trust DCT . All three stocks carry a Zacks Rank of 2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Cedar Realty's FFO per share estimates for 2017 remained unchanged at 54 cents in a month's time.
Urstadt Biddle Properties' 2017 FFO per share estimates have been revised upward to $1.25 over the past 60 days.
DCT Industrial Trust's current-year FFO per share estimates have been revised upward by a cent to $2.44 in a week's time.
Note: All EPS numbers presented in this write up represent funds from operations ("FFO") per share. 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.
Zacks' Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Regency Centers Corporation (REG): Free Stock Analysis Report Cedar Realty Trust, Inc. (CDR): Free Stock Analysis Report Urstadt Biddle Properties Inc. (UBA): Free Stock Analysis Report DCT Industrial Trust Inc (DCT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research