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PS Business Parks (PSB) Tops Q2 FFO Estimates, Hikes Dividend
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PS Business Parks, Inc. reported second-quarter 2018 funds from operations (FFO) of $1.59 per share, beating the Zacks Consensus Estimate of $1.58. The figure also came in 2.6% higher than $1.55 recorded in the prior-year quarter. The company also announced a 23.5% hike in its quarterly dividend.
Results highlight a rise in Same-Park net operating income (NOI) backed by growth in rental rates and occupancy, as well as improved NOI from non-Same-Park and multi-family assets.
Rental income came in at around $101.8 million, marking 2% growth from the year-ago tally. However, the reported figure missed the Zacks Consensus Estimate of $103.1 million.
Quarter in Detail
Same-Park rental income was up 2.4% year over year to $97.8 million, while Same-Park NOI climbed 2.1% year over year to $68.9 million, driven by improving rental rates and occupancy level.
Same-Park annualized rental income per occupied-square-foot inched up 1.4% to $15.36, while weighted average square-foot occupancy was 94.6%, up 90 basis points year over year.
Liquidity
PS Business Parks exited second-quarter 2018 with cash and cash equivalents of $7.2 million, down from $114.9 million reported at the end of the prior year.
Portfolio Update
During the April-June quarter, the company acquired two multi-tenant industrial parks, totaling 1.1 million rentable square feet of space in Springfield, VA, for $143.8 million. There are 19 buildings in the portfolio which are situated in the Springfield/Newington industrial submarket. The portfolio was 76.1% occupied as of the acquisition date.
Dividend Update
On Jul 24, the company announced a quarterly dividend of $1.05 per share, denoting an increase of 23.5% from the previous payout. The dividend is payable on Sep 27, to shareholders of record as of Sep 12, 2018.
Conclusion
We are encouraged with the decent FFO per share performance of PS Business Parks in the second quarter. Also, the dividend hike is encouraging for the company’s shareholders. Notably, healthy fundamentals in the multi-tenant flex, office and industrial asset categories are anticipated to help the company ride on the growth curve in the near-to-medium term. Nonetheless, supply is rising in certain submarkets and this could partly impede its growth momentum.
We now look forward to the earnings releases of other REITs like Kimco Realty Corporation (KIM - Free Report) , Digital Realty Trust, Inc. (DLR - Free Report) and CubeSmart (CUBE - Free Report) which are slated to report their quarterly numbers on Jul 26.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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PS Business Parks (PSB) Tops Q2 FFO Estimates, Hikes Dividend
PS Business Parks, Inc. reported second-quarter 2018 funds from operations (FFO) of $1.59 per share, beating the Zacks Consensus Estimate of $1.58. The figure also came in 2.6% higher than $1.55 recorded in the prior-year quarter. The company also announced a 23.5% hike in its quarterly dividend.
Results highlight a rise in Same-Park net operating income (NOI) backed by growth in rental rates and occupancy, as well as improved NOI from non-Same-Park and multi-family assets.
Rental income came in at around $101.8 million, marking 2% growth from the year-ago tally. However, the reported figure missed the Zacks Consensus Estimate of $103.1 million.
Quarter in Detail
Same-Park rental income was up 2.4% year over year to $97.8 million, while Same-Park NOI climbed 2.1% year over year to $68.9 million, driven by improving rental rates and occupancy level.
Same-Park annualized rental income per occupied-square-foot inched up 1.4% to $15.36, while weighted average square-foot occupancy was 94.6%, up 90 basis points year over year.
Liquidity
PS Business Parks exited second-quarter 2018 with cash and cash equivalents of $7.2 million, down from $114.9 million reported at the end of the prior year.
Portfolio Update
During the April-June quarter, the company acquired two multi-tenant industrial parks, totaling 1.1 million rentable square feet of space in Springfield, VA, for $143.8 million. There are 19 buildings in the portfolio which are situated in the Springfield/Newington industrial submarket. The portfolio was 76.1% occupied as of the acquisition date.
Dividend Update
On Jul 24, the company announced a quarterly dividend of $1.05 per share, denoting an increase of 23.5% from the previous payout. The dividend is payable on Sep 27, to shareholders of record as of Sep 12, 2018.
Conclusion
We are encouraged with the decent FFO per share performance of PS Business Parks in the second quarter. Also, the dividend hike is encouraging for the company’s shareholders. Notably, healthy fundamentals in the multi-tenant flex, office and industrial asset categories are anticipated to help the company ride on the growth curve in the near-to-medium term. Nonetheless, supply is rising in certain submarkets and this could partly impede its growth momentum.
PS Business Parks currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PS Business Parks, Inc. Price, Consensus and EPS Surprise
PS Business Parks, Inc. Price, Consensus and EPS Surprise | PS Business Parks, Inc. Quote
We now look forward to the earnings releases of other REITs like Kimco Realty Corporation (KIM - Free Report) , Digital Realty Trust, Inc. (DLR - Free Report) and CubeSmart (CUBE - Free Report) which are slated to report their quarterly numbers on Jul 26.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>