Back to top

Growth & Income

Zacks Equity Research

Post Properties

PPS

 ZacksTrade Now

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Post Properties Inc. (PPS - Snapshot Report) raised its guidance for 2012 during its second quarter report and offers a dividend yield of 2.1%, making it a solid pick for investors seeking both growth and income. Earnings for this Zacks #1 Rank (Strong Buy) multifamily REIT (real estate investment trust) are expected to grow 33.9% in 2012.

Strong Second Quarter

Post Properties reported strong second quarter results on July 30, with a 43.3% rise in FFO (fund from operations) to $39.7 million. On a per share basis, FFO increased 32.7% year over year to 73 cents, beating the Zacks Consensus Estimate by 22.4%.

Total revenues surged 9.0% year over year to $82.2 million. Same-store quarterly revenues increased 7.8% to $75.1 million. Same-store net operating income (NOI) increased 10.4% to $46.2 million, primarily due to a 6.5% hike in average rental rates to $1,341 per apartment unit. Average same-store economic occupancy remained relatively high at 96.1%, compared to 95.1% in the year-ago quarter.

Outlook Raised

Based on the superior second quarter results, management raised its FFO guidance for 2012 to between $2.50 and $2.60 per share from the earlier range of $2.26 – $2.38. The guidance is based on same-store revenue growth expectations of 6.25% - 6.75% and same-store NOI growth of 7.20% - 8.20%.

Analysts have revised their earnings estimate upward for both 2012 and 2013, driving the stock to a Zacks #1 Rank (Strong Buy). Over the past 90 days, the Zacks Consensus Estimate for 2012 increased 9.6% to $2.62, implying year-over-year growth of 33.9%. For 2013, the Zacks Consensus Estimate has increased 6.8% to $2.67 in the same timeframe.

Post Properties is scheduled to report again on October 29. The Zacks Consensus Estimate for the quarter is currently at 62 cents per share.

Dividend Payout

Post Properties paid a dividend of 25 cents per share in the second quarter of 2012. The quarterly dividend represents a 25.0% increase from the payout in the year-ago quarter. The current dividend payment affirms a yield of 2.1%.

Premium Valuation

The valuation metrics for Post Properties are at a premium on a price-to-earnings (P/E) and price-to-sales (P/S) basis. Shares are currently trading at a forward P/E of 18.47x versus the peer group average of 17.67x. On a P/S basis, shares are trading at 8.24x versus 7.74x for the peer group average. A healthy earnings growth prospect warrants the premium valuation of the company. Its PEG ratio is 1.48, based on a 5-year FFO growth rate of 12.5%.

Since December 7, 2011, Post Properties shares have consistently fared better than the simple moving average for 200 days or SMA (200). In addition, the stock has outperformed the S&P 500 index since November 18, 2010.

With a favorable supply/demand relationship, rising earnings estimates, robust growth projections and a decent dividend yield, Post Properties offers an enticing upside potential going forward. In addition, a continued focus on some of the country’s premium markets in major metropolitan areas bodes well for its long-term growth.

Headquartered in Atlanta, Georgia, Post Properties develops and operates luxury multi-family apartment communities under the renowned Post brand since its formation in 1971. The company presently operates in 10 markets across the U.S., with ownership interests in 21,982 apartment units in 59 communities. These include 1,471 apartment units in four communities held in unconsolidated entities and 1,810 apartment units in six communities under development or in lease-up stage. The company currently has a market cap of $2.6 billion.


Want More of Our Best Recommendations?

Zacks' Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Then each week he hand-selects the most compelling trades and serves them up to you in a new program called Zacks Confidential.

Learn More>>


Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.63 +6.47%
BOFL HOLDING BOFI 85.73 +5.50%
CELL THERAPE CTIC 3.14 +5.04%
RAMBUS INC RMBS 12.28 +4.13%
SHORETEL INC SHOR 8.03 +3.08%