Cousins Properties Incorporated (CUZ - Analyst Report) is anticipated to garner gross proceeds of $99.2 million (before underwriting discounts and commissions and estimated payable offering expenses) from the public offering of 8.7 million common shares. The company plans to use this amount to fully redeem its outstanding 7.50% Series B Cumulative Redeemable Preferred shares and for meeting other corporate needs.
For Cousins Properties, whose cash and cash equivalents stood at $0.98 millionas of Dec 31, 2013, the redemption of preferred shares is encouraging. This will help enhance the company’s financial flexibility and enable it to pursue strategic investments going forward. However, the share dilution impact resulting from the transaction cannot be avoided.
Last month, Cousins Properties reported a positive earnings surprise of 12.5% in fourth-quarter 2013, thanks to a more than two-fold year-over-year rise in total revenue. Following this announcement, this real estate investment trust (REIT) experienced positive estimate revision for both 2014 and 2015. In particular, over the last 30 days, the Zacks Consensus Estimate for 2014 and 2015 increased 6.0% to 70 cents and 10.1% to 76 cents, respectively.
Atlanta, Georgia-based Cousins Properties engages in the acquisition, ownership, development and management of upscale office and retail properties throughout the Sunbelt markets of the U.S., with special focus on Georgia, Texas and North Carolina.
Cousins Properties currently has a Zacks Rank #2 (Buy). Some other stocks worth considering in the REIT industry are Liberty Property Trust (LPT - Analyst Report), Healthcare Trust of America, Inc. (HTA - Snapshot Report) and Public Storage (PSA - Analyst Report). All stocks carry the same Rank as Cousins Properties.
Note: FFO, a widely used metric to gauge the performance of REITs, are obtained after adding depreciation, amortization and other non-cash expenses to net income.