At a time when mall REITs are plagued with issues like store closures and bankruptcy of retailers at their malls amid rapid shift in customers' shopping preferences toward online channels, shares of Regency Centers CorporationREG are displaying strength.
In fact, Regency's shares outperformed the Zacks categorized REIT and Equity Trust - Retail industry over the past one month. Also, the funds from operations ("FFO") per share estimates for second-quarter and full-year 2017 moved north, over the past 30 days, reflecting analysts' bullish sentiment.
Notably, this retail REIT, focused on grocery-anchored assets which are usually necessity driven, is making solid strides in the Equity One merger integration. The company has engaged RealFoundations (RF) to provide guidance, planning, program management and data conversion services for this. These efficient moves have permitted Regency to already realize the anticipated $27 million of G & A synergies.
Admittedly, this merger with Equity One has elevated the company's position in the retail real estate market, opening up a number of opportunities to propel growth. It has created a high quality portfolio of 429 properties, mainly grocery anchored, situated in several top markets. The move also led to the company's inclusion on the S&P 500 Index.
Additionally, Regency has considerable experience in the retail real estate industry, with 227 shopping centers' development since 2000, denoting an investment at completion of over $3.5 billion.
Furthermore, Regency continues to depict robust fundamentals and improving prospects. Backed by better-than-expected growth in revenues, the company's first-quarter 2017 core FFO per share of 90 cents came ahead of the Zacks Consensus Estimate of 83 cents.
In fact, this Zacks Rank #2 (Buy) stock has risen over 4.1% in the past one month compared with 3.3% gain of the Zacks categorized REIT and Equity Trust - Retail industry.
Why a Solid Choice?
Revenue Strength: Over the past few quarters, Regency's top line has been exhibiting strength. In fact, since second-quarter 2016 through first-quarter 2017, the company reported better-than-expected revenue figures in each quarter.
Further, the company's projected sales growth of 57.3% for 2017 is way ahead of the industry's expected growth rate of 1.7%, signaling brighter days ahead.
FFO per Share Growth: Regency witnessed nearly 11.2% growth in funds from operations (FFO) per share over the last three-five years against 4.3% of that of the industry. Further, FFO per share is estimated to grow at the rate of 11.0% for 2017, which is way ahead of the industry average of 2.9%.
Superior ROE: Regency's Return on Equity (ROE) ratio is 14.95% compared with the industry average of 13.35%. This indicates that the company reinvests more efficiently compared to the industry.
Strong Leverage: The debt-to-equity ratio for Regency is 0.51 compared with the industry average of 1.20. This highlights greater financial stability for the company and lesser risks for shareholders.
Other Key Picks
Other top-ranked stocks in the real estate space include Liberty Property Trust LPT , PS Business Parks, Inc. PSB and Whitestone REIT WSR . All three stocks carry a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Liberty Property Trust and PS Business Parks have long-term growth rates of 6% and 5%, respectively.
Whitestone REIT's FFO per share estimates for 2017 have moved up 4.0% to $1.05, over the past 60 days.
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.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>
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
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.