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Here's Why You Should Hold On To Kimco (KIM) Stock for Now
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Kimco Realty Corp. (KIM - Free Report) enjoys the ownership of high-quality assets concentrated in the top 20 major metro markets, which offer several growth levers. The REIT has achieved significant diversification, with respect to geography and tenants, which will likely support its cash flows.
The decision to acquire Weingarten Realty Investors for $3.87 billion seems a strategic fit as it will strengthen Kimco’s portfolio with high-quality assets in the growing Sun Bet markets. The deal is projected to be immediately accretive to the key earnings metrics, while deleveraging the balance sheet.
In these uncertain times, having a grocery component has been the saving grace of retail REITs, with Kimco being backed by a well-located and largely grocery-anchored portfolio. Hence, the retail REIT enjoys a decent leasing activity and its rent-collection figures remain healthy.
Kimco’s emphasis on mixed-use assets clustered in the strong economic metropolitan statistical areas act as a tailwind.
Apart from these, the REIT has been making concerted efforts to bolster its financial flexibility to sustain the challenging environment. At the end of first-quarter 2021, it had $2.3 billion of immediate liquidity, with nearly $254 million in cash and cash equivalents, and $2 billion available under its unsecured revolving credit facility.
Kimco currently carries a Zacks Rank #3 (Hold). The stock has gained 34.7%, outperforming its industry’s rally of 28.4% in the past six months. In addition to that, the recent trend in estimate revisions indicates a bullish stance as the Zacks Consensus Estimate for both 2021 and 2022 funds from operations per share has witnessed a marginal upward revision over the past month. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
Several retail REITs, including Kimco, Simon Property Group (SPG - Free Report) , Macerich (MAC - Free Report) and Federal Realty (FRT - Free Report) , have been battling store closure and bankruptcy issues because of lower footfall due to social-distancing requirements and higher e-commerce adoption amid the coronavirus crisis.
After the temporary suspension of dividends on its common shares, Kimco has reinstated the same. However, the figures are way down from the pre-pandemic period. As dividend payouts remain the biggest attraction for REIT investors, this puts the company in a disadvantageous position.
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Here's Why You Should Hold On To Kimco (KIM) Stock for Now
Kimco Realty Corp. (KIM - Free Report) enjoys the ownership of high-quality assets concentrated in the top 20 major metro markets, which offer several growth levers. The REIT has achieved significant diversification, with respect to geography and tenants, which will likely support its cash flows.
The decision to acquire Weingarten Realty Investors for $3.87 billion seems a strategic fit as it will strengthen Kimco’s portfolio with high-quality assets in the growing Sun Bet markets. The deal is projected to be immediately accretive to the key earnings metrics, while deleveraging the balance sheet.
In these uncertain times, having a grocery component has been the saving grace of retail REITs, with Kimco being backed by a well-located and largely grocery-anchored portfolio. Hence, the retail REIT enjoys a decent leasing activity and its rent-collection figures remain healthy.
Kimco’s emphasis on mixed-use assets clustered in the strong economic metropolitan statistical areas act as a tailwind.
Apart from these, the REIT has been making concerted efforts to bolster its financial flexibility to sustain the challenging environment. At the end of first-quarter 2021, it had $2.3 billion of immediate liquidity, with nearly $254 million in cash and cash equivalents, and $2 billion available under its unsecured revolving credit facility.
Kimco currently carries a Zacks Rank #3 (Hold). The stock has gained 34.7%, outperforming its industry’s rally of 28.4% in the past six months. In addition to that, the recent trend in estimate revisions indicates a bullish stance as the Zacks Consensus Estimate for both 2021 and 2022 funds from operations per share has witnessed a marginal upward revision over the past month. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Several retail REITs, including Kimco, Simon Property Group (SPG - Free Report) , Macerich (MAC - Free Report) and Federal Realty (FRT - Free Report) , have been battling store closure and bankruptcy issues because of lower footfall due to social-distancing requirements and higher e-commerce adoption amid the coronavirus crisis.
After the temporary suspension of dividends on its common shares, Kimco has reinstated the same. However, the figures are way down from the pre-pandemic period. As dividend payouts remain the biggest attraction for REIT investors, this puts the company in a disadvantageous position.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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