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Kimco's (KIM) 2020 Vision On Track, Online Sales a Concern
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Kimco Realty Corporation (KIM - Free Report) , New Hyde Park, NY-based retail real estate investment trust (REIT) remains on track with its strategic 2020 Vision, which envisages the ownership of premium assets in major U.S. markets in the U.S. and a reduction in the joint-venture portfolio.
In fact, from the beginning of the year through Oct 27, Kimco’s share of acquisitions totaled $451.9 million, while its share of dispositions aggregated $918.6 million, from the sale of stakes in 34 Canadian properties for USD $571.5 million as well as 25 U.S. properties for $347.1 million.
Further, the company had earlier disclosed the execution of strategic measures, in order to boost its capital structure as well as enhance the growth profile and tax efficiency. These efforts are expected to drive the company’s bottom line over the long term.
Moreover, Kimco has achieved significant diversification through geographic distribution of its properties and avoidance of dependence on any single property, along with a large tenant base.
The company is also aiming to expand its small shops portfolio. These shops comprise service-based industries, such as restaurants, saloons and spas, personal fitness and medical practices. They enjoy frequent customer traffic and are Internet-resistant. Amid limited new supply and favorable demographics, we believe that this diversification would enable Kimco to limit its operating and leasing risks.
However, though upbeat consumer confidence and an improving economy have infused optimism into the retail market, mall traffic continues to suffer amid a rapid shift in customers’ shopping preferences and patterns, with online purchases growing by leaps and bounds.
These have made retailers reconsider their footprint and eventually opt for store closures. Further, retailers that are not being able to cope with competition are filing bankruptcies. This has emerged as a pressing concern for retail REITs, including Kimco, as the trend is curtailing demand for the retail real estate space, considerably. Moreover, the earnings-dilutive impact from high disposition activity cannot be averted.
Amid this, the Zacks categorized REIT- Equity Trust – Retail industry has declined 6.1% in the past six months, while shares of Kimco fell 9.5%.
Moreover, over the last seven days, the Zacks Consensus Estimate for 2016 and 2017 funds from operations (FFO) per share remained unchanged at $1.32 and $1.60, respectively. Kimco currently has a Zacks Rank #3 (Hold).
For Urban Edge Properties, the expected growth rate for FFO per share is 37.6% for 2016 and 6.3% for 2017.
DCT Industrial delivered an average positive surprise of 5.18% over the trailing four quarters.
Prologis has exceeded estimates in each of the trailing four quarters, with an average beat of 3.15%.
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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Kimco's (KIM) 2020 Vision On Track, Online Sales a Concern
Kimco Realty Corporation (KIM - Free Report) , New Hyde Park, NY-based retail real estate investment trust (REIT) remains on track with its strategic 2020 Vision, which envisages the ownership of premium assets in major U.S. markets in the U.S. and a reduction in the joint-venture portfolio.
In fact, from the beginning of the year through Oct 27, Kimco’s share of acquisitions totaled $451.9 million, while its share of dispositions aggregated $918.6 million, from the sale of stakes in 34 Canadian properties for USD $571.5 million as well as 25 U.S. properties for $347.1 million.
Further, the company had earlier disclosed the execution of strategic measures, in order to boost its capital structure as well as enhance the growth profile and tax efficiency. These efforts are expected to drive the company’s bottom line over the long term.
Moreover, Kimco has achieved significant diversification through geographic distribution of its properties and avoidance of dependence on any single property, along with a large tenant base.
The company is also aiming to expand its small shops portfolio. These shops comprise service-based industries, such as restaurants, saloons and spas, personal fitness and medical practices. They enjoy frequent customer traffic and are Internet-resistant. Amid limited new supply and favorable demographics, we believe that this diversification would enable Kimco to limit its operating and leasing risks.
However, though upbeat consumer confidence and an improving economy have infused optimism into the retail market, mall traffic continues to suffer amid a rapid shift in customers’ shopping preferences and patterns, with online purchases growing by leaps and bounds.
These have made retailers reconsider their footprint and eventually opt for store closures. Further, retailers that are not being able to cope with competition are filing bankruptcies. This has emerged as a pressing concern for retail REITs, including Kimco, as the trend is curtailing demand for the retail real estate space, considerably. Moreover, the earnings-dilutive impact from high disposition activity cannot be averted.
Amid this, the Zacks categorized REIT- Equity Trust – Retail industry has declined 6.1% in the past six months, while shares of Kimco fell 9.5%.
Moreover, over the last seven days, the Zacks Consensus Estimate for 2016 and 2017 funds from operations (FFO) per share remained unchanged at $1.32 and $1.60, respectively. Kimco currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the REIT industry, include Urban Edge Properties (UE - Free Report) , DCT Industrial Trust and Prologis Inc. (PLD - Free Report) , all of them carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
For Urban Edge Properties, the expected growth rate for FFO per share is 37.6% for 2016 and 6.3% for 2017.
DCT Industrial delivered an average positive surprise of 5.18% over the trailing four quarters.
Prologis has exceeded estimates in each of the trailing four quarters, with an average beat of 3.15%.
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’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>