We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
CBRE Group (CBG) Displays Solid Prospects: Should You Buy?
Read MoreHide Full Article
CBRE Group, Inc. is focused on improving its business with strategic buyouts. In February, the company announced the acquisition of the business of Capstone Financial Solutions LLC, a leading commercial real estate finance and consulting firm in the U.S. With this buyout, CBRE improved its debt and structured finance service offering nationally.
Further, in Jan 2017, the company declared the acquisition of New York City-based Floored, Inc., which is a reputed producer of advanced technology for commercial real estate. The transaction is likely to drive the company’s capabilities to develop technology innovations that boost marketing and leasing of commercial properties.
Moreover, CBRE continues to display robust fundamentals and improving prospects. Last month, the company reported fourth-quarter 2016 adjusted earnings per share of 93 cents, handily beating the Zacks Consensus Estimate of 79 cents. The figure also denoted a 14.8% increase from the prior-year quarter tally of 81 cents. Fee revenues were up 4% (6% in local currency) year over year to $2.7 billion. Moreover, excluding contributions from all acquisitions, organic fee revenue advanced 3% (5% in local currency).
Further, this Zacks Rank #1 (Strong Buy) stock has risen 13.2% in the past three months, compared with 7.8% gain of the Zacks categorized Real Estate – Operations industry.
Why a Solid Choice?
Revenue Strength: CBRE’s top line has been exhibiting strength for the past several years. In fact, from 2003 to 2016, the company’s revenues have grown at a CAGR of 16%. Additionally, the company’s projected sales growth is 5.9% for 2017.
Moreover, strategic in-fill acquisitions have played a vital role in widening the company’s geographic coverage, as well as expanding and reinforcing its service offerings. In addition, CBRE opts for larger, transformational deals driven by macro policies. In fact, the company has completed over 30 acquisitions since 2013 and more than 100 since 2005, including four large acquisitions. As market conditions continue to improve, we believe that these opportunistic acquisitions would serve as growth drivers, supplementing the company’s organic growth.
Cash Flow Growth: CBRE enjoyed historical cash flow growth (3–5 years) of 20.6%, which comfortably exceeded the industry’s growth of 12.6%. Also, its current cash flow growth of 13.9% is much above the industry’s rate of 1.9%.
CBRE ended 2016 with over $3.5 billion of available liquidity, including around $700 million of cash available for company use and $2.8 billion of undrawn capacity on its revolving credit facility. Further, there are no required debt repayments until 2019.
EPS Growth: CBRE has witnessed 11.2% growth in EPS in the last three to five years against the industry’s 7.0%. Further, its projected EPS growth rate for 2017 is around 4.9%, which is better than the 2.8% increase projected for the industry. In addition, EPS is estimated to grow at a rate of 5.1% in 2018.
Superior ROE: CBRE’s Return on Equity (ROE) ratio is 25.4% compared with the industry average of 4.8%. This indicates that the company reinvests more efficiently compared to the industry.
VGM Scoreof B: CBRE has a VGM Score of B. This score is also of great assistance in selecting stocks. Importantly, this scoring system helps in picking winning stocks in their individual industry categories. Specifically, CBRE’s Value Score of B indicates it would be a good pick for value investors. Moreover, the financial health and growth prospects of CBRE highlight its potential to outperform the market. The stock currently has a Growth Score of B.
Key Picks
Investors interested in the real estate industry may consider stocks like Kennedy-Wilson Holdings, Inc. (KW - Free Report) , The RMR Group Inc. (RMR - Free Report) and Colliers International Group Inc. (CIGI - Free Report) . While Kennedy-Wilson and The RMR Group sport a Zacks Rank #1 (Strong Buy), Colliers International carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kennedy-Wilson has a long-term growth rate of 8.0%. RMR Group’s estimate for fiscal 2017 moved 2.2% north over the past 60 days to $1.83 per share. Colliers International’s estimates for 2017 also climbed 9.0% over the past 30 days to $2.78 per share.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
Image: Bigstock
CBRE Group (CBG) Displays Solid Prospects: Should You Buy?
CBRE Group, Inc. is focused on improving its business with strategic buyouts. In February, the company announced the acquisition of the business of Capstone Financial Solutions LLC, a leading commercial real estate finance and consulting firm in the U.S. With this buyout, CBRE improved its debt and structured finance service offering nationally.
Further, in Jan 2017, the company declared the acquisition of New York City-based Floored, Inc., which is a reputed producer of advanced technology for commercial real estate. The transaction is likely to drive the company’s capabilities to develop technology innovations that boost marketing and leasing of commercial properties.
Moreover, CBRE continues to display robust fundamentals and improving prospects. Last month, the company reported fourth-quarter 2016 adjusted earnings per share of 93 cents, handily beating the Zacks Consensus Estimate of 79 cents. The figure also denoted a 14.8% increase from the prior-year quarter tally of 81 cents. Fee revenues were up 4% (6% in local currency) year over year to $2.7 billion. Moreover, excluding contributions from all acquisitions, organic fee revenue advanced 3% (5% in local currency).
Further, this Zacks Rank #1 (Strong Buy) stock has risen 13.2% in the past three months, compared with 7.8% gain of the Zacks categorized Real Estate – Operations industry.
Why a Solid Choice?
Revenue Strength: CBRE’s top line has been exhibiting strength for the past several years. In fact, from 2003 to 2016, the company’s revenues have grown at a CAGR of 16%. Additionally, the company’s projected sales growth is 5.9% for 2017.
Moreover, strategic in-fill acquisitions have played a vital role in widening the company’s geographic coverage, as well as expanding and reinforcing its service offerings. In addition, CBRE opts for larger, transformational deals driven by macro policies. In fact, the company has completed over 30 acquisitions since 2013 and more than 100 since 2005, including four large acquisitions. As market conditions continue to improve, we believe that these opportunistic acquisitions would serve as growth drivers, supplementing the company’s organic growth.
Cash Flow Growth: CBRE enjoyed historical cash flow growth (3–5 years) of 20.6%, which comfortably exceeded the industry’s growth of 12.6%. Also, its current cash flow growth of 13.9% is much above the industry’s rate of 1.9%.
CBRE ended 2016 with over $3.5 billion of available liquidity, including around $700 million of cash available for company use and $2.8 billion of undrawn capacity on its revolving credit facility. Further, there are no required debt repayments until 2019.
EPS Growth: CBRE has witnessed 11.2% growth in EPS in the last three to five years against the industry’s 7.0%. Further, its projected EPS growth rate for 2017 is around 4.9%, which is better than the 2.8% increase projected for the industry. In addition, EPS is estimated to grow at a rate of 5.1% in 2018.
Superior ROE: CBRE’s Return on Equity (ROE) ratio is 25.4% compared with the industry average of 4.8%. This indicates that the company reinvests more efficiently compared to the industry.
VGM Score of B: CBRE has a VGM Score of B. This score is also of great assistance in selecting stocks. Importantly, this scoring system helps in picking winning stocks in their individual industry categories. Specifically, CBRE’s Value Score of B indicates it would be a good pick for value investors. Moreover, the financial health and growth prospects of CBRE highlight its potential to outperform the market. The stock currently has a Growth Score of B.
Key Picks
Investors interested in the real estate industry may consider stocks like Kennedy-Wilson Holdings, Inc. (KW - Free Report) , The RMR Group Inc. (RMR - Free Report) and Colliers International Group Inc. (CIGI - Free Report) . While Kennedy-Wilson and The RMR Group sport a Zacks Rank #1 (Strong Buy), Colliers International carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kennedy-Wilson has a long-term growth rate of 8.0%. RMR Group’s estimate for fiscal 2017 moved 2.2% north over the past 60 days to $1.83 per share. Colliers International’s estimates for 2017 also climbed 9.0% over the past 30 days to $2.78 per share.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>