We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Hold On to Kimco Realty Stock for Now
Read MoreHide Full Article
Kimco Realty Corp. (KIM - Free Report) enjoys ownership of high-quality assets, concentrated in the top 20 major metro markets, which offer several growth levers. The retail REIT has achieved significant diversification with respect to geography and tenants, which will likely support the company’s cash flow.
Further, in these uncertain times, having a grocery component has been saving the grace of retail REITs, and Kimco has a high-quality, mixed-use portfolio concentrated in the top U.S. markets, and more than 77% of its annual base rent comes from grocery-anchored centers. Moreover, the company’s focus on multi-family assets is encouraging as demand for this asset category is comparatively better than other asset types.
In addition, curbside pick-ups, combined with click and collect options, are likely to gain attention as customers prefer social distancing. Therefore, the company recently launched the curbside pick-up program to bank on this growing trend. Such efforts are likely to add competitive advantage in current times. Given the strength of its retailers with a developed omni-channel presence, Kimco remains well poised to sail through the challenging times.
The company has been making concerted efforts to bolster its financial flexibility to counter through the challenging environment. At the end of April, Kimco had access to more than $2.2 billion of immediate liquidity, with nearly $900 million of cash on the balance sheet and $1.3 billion available under its unsecured revolving credit facility.
The company also has more than 320 unencumbered assets, which represents roughly 80% of its total NOI. Kimco has one of the longest weighted-average debt maturity profiles in the industry as well, owing to its decent balance-sheet management so far and the company’s neart-term debt maturities seem manageable.
Recently, Kimco decided for partial monetization of its investment in Albertsons Companies, Inc., in association with Albertsons’ $1.75-billion sale of convertible preferred stock, and lower its stake to 7.5% from 9.29%. As liquidity is important amid the coronavirus pandemic and the resultant impact on the economy and financial markets, the move to monetize Kimco’s Albertsons investment seems a strategic fit.
However, retail REITs, including Kimco, Simon Property Group (SPG - Free Report) , Macerich (MAC - Free Report) , Federal Realty (FRT - Free Report) and several others, which have already been battling store closure and bankruptcy issues, are feeling the brunt because consumers are avoiding public gatherings and several stores are closed or working with reduced hours.
Kimco noted that roughly 44% of annual base rent across the portfolio comes from tenants that are subject to some form of mandatory closure or have voluntarily closed. As a result, there is a significant increase in the number of tenants that have made late or partial rent payments, requested a deferral of rent payments, or defaulted on rent payments and given the current environment, this trend is likely to continue in the near term.
Solid dividend payouts remain the biggest attraction for REIT investors and Kimco had been committed to that. However, on May 8, amid the coronavirus pandemic and related economic uncertainties, the company announced that its board has temporarily suspended the dividend on Kimco’s common shares. The company’s financial performance and economic outlook will be monitored on a monthly basis by its board. Nonetheless, it plans to restore the common dividend at a later date in 2020 of at least the amount required to maintain compliance with its REIT-taxable income-distribution requirements.
Shares of Kimco have depreciated 40.5%, wider than the 32.9% decline of its industry in the year-to-date period.
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
Image: Shutterstock
Here's Why You Should Hold On to Kimco Realty Stock for Now
Kimco Realty Corp. (KIM - Free Report) enjoys ownership of high-quality assets, concentrated in the top 20 major metro markets, which offer several growth levers. The retail REIT has achieved significant diversification with respect to geography and tenants, which will likely support the company’s cash flow.
Further, in these uncertain times, having a grocery component has been saving the grace of retail REITs, and Kimco has a high-quality, mixed-use portfolio concentrated in the top U.S. markets, and more than 77% of its annual base rent comes from grocery-anchored centers. Moreover, the company’s focus on multi-family assets is encouraging as demand for this asset category is comparatively better than other asset types.
In addition, curbside pick-ups, combined with click and collect options, are likely to gain attention as customers prefer social distancing. Therefore, the company recently launched the curbside pick-up program to bank on this growing trend. Such efforts are likely to add competitive advantage in current times. Given the strength of its retailers with a developed omni-channel presence, Kimco remains well poised to sail through the challenging times.
The company has been making concerted efforts to bolster its financial flexibility to counter through the challenging environment. At the end of April, Kimco had access to more than $2.2 billion of immediate liquidity, with nearly $900 million of cash on the balance sheet and $1.3 billion available under its unsecured revolving credit facility.
The company also has more than 320 unencumbered assets, which represents roughly 80% of its total NOI. Kimco has one of the longest weighted-average debt maturity profiles in the industry as well, owing to its decent balance-sheet management so far and the company’s neart-term debt maturities seem manageable.
Recently, Kimco decided for partial monetization of its investment in Albertsons Companies, Inc., in association with Albertsons’ $1.75-billion sale of convertible preferred stock, and lower its stake to 7.5% from 9.29%. As liquidity is important amid the coronavirus pandemic and the resultant impact on the economy and financial markets, the move to monetize Kimco’s Albertsons investment seems a strategic fit.
However, retail REITs, including Kimco, Simon Property Group (SPG - Free Report) , Macerich (MAC - Free Report) , Federal Realty (FRT - Free Report) and several others, which have already been battling store closure and bankruptcy issues, are feeling the brunt because consumers are avoiding public gatherings and several stores are closed or working with reduced hours.
Kimco noted that roughly 44% of annual base rent across the portfolio comes from tenants that are subject to some form of mandatory closure or have voluntarily closed. As a result, there is a significant increase in the number of tenants that have made late or partial rent payments, requested a deferral of rent payments, or defaulted on rent payments and given the current environment, this trend is likely to continue in the near term.
Solid dividend payouts remain the biggest attraction for REIT investors and Kimco had been committed to that. However, on May 8, amid the coronavirus pandemic and related economic uncertainties, the company announced that its board has temporarily suspended the dividend on Kimco’s common shares. The company’s financial performance and economic outlook will be monitored on a monthly basis by its board. Nonetheless, it plans to restore the common dividend at a later date in 2020 of at least the amount required to maintain compliance with its REIT-taxable income-distribution requirements.
Shares of Kimco have depreciated 40.5%, wider than the 32.9% decline of its industry in the year-to-date period.
Currently, the stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>