Residential REIT, AvalonBay Communities, Inc. (AVB - Free Report) declared an uptick in its rental revenue outlook for first-quarter 2017. Reflecting positive sentiments, shares of AvalonBay inched up over 0.9% during normal trading hours on Mar 6.
Specifically, AvalonBay expects first-quarter 2017 total rental revenue for established communities to grow 3.1–3.2% over the prior-year period. At the midpoint, this denotes an expansion of around 25 basis points from the figure projected earlier for the first quarter when the company issued the full-year rental revenue growth outlook for established communities on Feb 1.
Admittedly, completion of a number of projects in its markets, leading to higher supply is a concern for AvalonBay as elevated supply usually leads to lesser absorption, curtails the landlord’s capability to demand more rents and leads to a rise in concession activity. However, amid this, increase in rental revenue outlook, even by 25 basis points at the midpoint, is encouraging, and reaffirms strength and stability of the company’s fundamentals.
Also, last month, AvalonBay came up with a better-than-expected performance for the fourth quarter, reporting core funds from operations (FFO) per share of $2.12, which surpassed the Zacks Consensus Estimate of $2.10. Growth in net operating income (NOI) from newly developed and existing operating communities contributed to this performance. However, the benefit was partly offset by a rise in interest expense. The company also declared a 5.2% hike in its quarterly dividend.
AvalonBay enjoys high quality assets in premium markets, which aid it in generating steady rental revenues. Further, rising consumer confidence driven by job growth, sturdy balance sheet and favorable demographic pattern supplement its growth prospects.
In addition, AvalonBay’s shares outperformed the Zacks categorized REIT Equity Trust – Residential industry over the past three months. During this time period, shares of the company ascended 8.3% against the industry’s increase of 6.6%.
AvalonBay currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Investors interested in the REIT industry can also consider other better-ranked stocks like Preferred Apartment Communities, Inc. , Equity LifeStyle Properties, Inc. (ELS - Free Report) and W. P. Carey Inc. (WPC - Free Report) . While Preferred Apartment Communities sports a Zacks Rank #1, Equity LifeStyle Properties and W. P. Carey have a Zacks Rank #2 (Buy).
Preferred Apartment Communities currently has a long-term growth rate of 7.0%. Equity LifeStyle Properties delivered an average beat of 1.48% over the four trailing quarters. Its estimates for 2017 also inched up 0.3% to $3.56 over the past 60 days.
W. P. Carey too put up a decent performance, surpassing the Zacks Consensus Estimate in each of the four trailing quarters, with an average positive surprise of 12.38%.
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.
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Residential REIT, AvalonBay Communities, Inc. (AVB - Free Report) declared an uptick in its rental revenue outlook for first-quarter 2017. Reflecting positive sentiments, shares of AvalonBay inched up over 0.9% during normal trading hours on Mar 6.
Specifically, AvalonBay expects first-quarter 2017 total rental revenue for established communities to grow 3.1–3.2% over the prior-year period. At the midpoint, this denotes an expansion of around 25 basis points from the figure projected earlier for the first quarter when the company issued the full-year rental revenue growth outlook for established communities on Feb 1.
Admittedly, completion of a number of projects in its markets, leading to higher supply is a concern for AvalonBay as elevated supply usually leads to lesser absorption, curtails the landlord’s capability to demand more rents and leads to a rise in concession activity. However, amid this, increase in rental revenue outlook, even by 25 basis points at the midpoint, is encouraging, and reaffirms strength and stability of the company’s fundamentals.
Also, last month, AvalonBay came up with a better-than-expected performance for the fourth quarter, reporting core funds from operations (FFO) per share of $2.12, which surpassed the Zacks Consensus Estimate of $2.10. Growth in net operating income (NOI) from newly developed and existing operating communities contributed to this performance. However, the benefit was partly offset by a rise in interest expense. The company also declared a 5.2% hike in its quarterly dividend.
AvalonBay enjoys high quality assets in premium markets, which aid it in generating steady rental revenues. Further, rising consumer confidence driven by job growth, sturdy balance sheet and favorable demographic pattern supplement its growth prospects.
In addition, AvalonBay’s shares outperformed the Zacks categorized REIT Equity Trust – Residential industry over the past three months. During this time period, shares of the company ascended 8.3% against the industry’s increase of 6.6%.
AvalonBay currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Investors interested in the REIT industry can also consider other better-ranked stocks like Preferred Apartment Communities, Inc. , Equity LifeStyle Properties, Inc. (ELS - Free Report) and W. P. Carey Inc. (WPC - Free Report) . While Preferred Apartment Communities sports a Zacks Rank #1, Equity LifeStyle Properties and W. P. Carey have a Zacks Rank #2 (Buy).
Preferred Apartment Communities currently has a long-term growth rate of 7.0%. Equity LifeStyle Properties delivered an average beat of 1.48% over the four trailing quarters. Its estimates for 2017 also inched up 0.3% to $3.56 over the past 60 days.
W. P. Carey too put up a decent performance, surpassing the Zacks Consensus Estimate in each of the four trailing quarters, with an average positive surprise of 12.38%.
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.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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