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Here's Why You Should Hold Regency Centers (REG) Stock Now
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Regency Centers Corp. (REG - Free Report) primarily focuses on building a premium portfolio of grocery-anchored shopping centers. Such centers are usually necessity driven and drive a dependable traffic. The company’s premium shopping centers are situated in affluent sub-urban and near urban trade areas, where consumers have high spending power, enabling it to attract top grocers and retailers. In addition, as more people are moving into the suburbs, Regency is likely to offer a long-term benefit to its sub-urban shopping center portfolio.
Further, in these uncertain times, having a grocery component has been the saving grace of retail REITs, and Regency has numerous industry-leading grocers as tenants. It has a high quality open-air shopping center portfolio with 80% grocery-anchored neighborhood and community centers. In addition, with a focus on necessity, service, convenience, and value retailers, Regency’s portfolio comprised 46% of pro-rate annual base rent from essential retail and services tenancy as of Mar 31, 2021. Significant essential retail businesses at the company’s centers have enabled its properties to remain open, operating for the entirety of the pandemic.
Regency is focused on strengthening its balance sheet. As of Mar 31, 2021, the retail REIT had full capacity under its $1.2-billion revolving credit facility. Additionally, the company has no meaningful unsecured debt maturities until 2024. This low leverage with limited near-term maturities offers flexibility to the company. Moreover, the company enjoys a large pool of unencumbered assets and good relationships with lenders. As of Mar 31, 2021, 89.7% of its wholly-owned real estate assets were unencumbered. With a high percentage of such assets, the company can enjoy accessibility to secured and unsecured debt markets, and maintain availability on the line.
Also, shares of this Zacks Rank #3 (Hold) company have gained 19.3% in the past three months compared with the industry's 12.8% rally. Also, the trend in estimate revisions for 2021 funds from operations (FFO) per share indicates a favorable outlook for the company as the estimates have been revised nearly 1% upward over the past week. Therefore, given the progress on fundamentals and upward estimate revisions, the stock has decent upside potential in the upcoming period.
Nonetheless, move-outs, store closures and retailer bankruptcies are likely to affect the performance of the retail real estate market in the near term. This, in turn, will likely affect the performance of retail REITs, including Macerich Company (MAC - Free Report) , Simon Property (SPG - Free Report) , Kimco Realty Corporation (KIM - Free Report) and Regency Centers.
Recent efforts of online retailers to go deeper into the grocery business has also emerged as a concern for Regency, which focuses on building a premium portfolio of grocery-anchored shopping centers.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Here's Why You Should Hold Regency Centers (REG) Stock Now
Regency Centers Corp. (REG - Free Report) primarily focuses on building a premium portfolio of grocery-anchored shopping centers. Such centers are usually necessity driven and drive a dependable traffic. The company’s premium shopping centers are situated in affluent sub-urban and near urban trade areas, where consumers have high spending power, enabling it to attract top grocers and retailers. In addition, as more people are moving into the suburbs, Regency is likely to offer a long-term benefit to its sub-urban shopping center portfolio.
Further, in these uncertain times, having a grocery component has been the saving grace of retail REITs, and Regency has numerous industry-leading grocers as tenants. It has a high quality open-air shopping center portfolio with 80% grocery-anchored neighborhood and community centers. In addition, with a focus on necessity, service, convenience, and value retailers, Regency’s portfolio comprised 46% of pro-rate annual base rent from essential retail and services tenancy as of Mar 31, 2021. Significant essential retail businesses at the company’s centers have enabled its properties to remain open, operating for the entirety of the pandemic.
Regency is focused on strengthening its balance sheet. As of Mar 31, 2021, the retail REIT had full capacity under its $1.2-billion revolving credit facility. Additionally, the company has no meaningful unsecured debt maturities until 2024. This low leverage with limited near-term maturities offers flexibility to the company. Moreover, the company enjoys a large pool of unencumbered assets and good relationships with lenders. As of Mar 31, 2021, 89.7% of its wholly-owned real estate assets were unencumbered. With a high percentage of such assets, the company can enjoy accessibility to secured and unsecured debt markets, and maintain availability on the line.
Also, shares of this Zacks Rank #3 (Hold) company have gained 19.3% in the past three months compared with the industry's 12.8% rally. Also, the trend in estimate revisions for 2021 funds from operations (FFO) per share indicates a favorable outlook for the company as the estimates have been revised nearly 1% upward over the past week. Therefore, given the progress on fundamentals and upward estimate revisions, the stock has decent upside potential in the upcoming period.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Nonetheless, move-outs, store closures and retailer bankruptcies are likely to affect the performance of the retail real estate market in the near term. This, in turn, will likely affect the performance of retail REITs, including Macerich Company (MAC - Free Report) , Simon Property (SPG - Free Report) , Kimco Realty Corporation (KIM - Free Report) and Regency Centers.
Recent efforts of online retailers to go deeper into the grocery business has also emerged as a concern for Regency, which focuses on building a premium portfolio of grocery-anchored shopping centers.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Time to Invest in Legal Marijuana
If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027.
After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%
You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.
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