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Regency Centers Up 16.1% in 6 Months: Will It Continue to Rise?
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Shares of Regency Centers (REG - Free Report) have rallied 16.1% in six months, outperforming the industry's growth of 5.2%.
Regency Centers is one of the leading retail real estate investment trusts (REITs) in the United States. The company’s portfolio mainly consists of grocery-anchored community and neighborhood centers, ensuring dependable traffic.
Last month, Regency Centers reported second-quarter 2024 NAREIT funds from operations (FFO) per share of $1.06, which outpaced the Zacks Consensus Estimate of $1.02. Results reflected healthy leasing activity and a year-over-year improvement in the base rent. The company also raised its 2024 outlook.
Analysts seem bullish about this Zacks Rank #2 (Buy) company, with the Zacks Consensus Estimate for its 2024 FFO per share being raised marginally over the past week to $4.23.
Image Source: Zacks Investment Research
Factors Behind REG's Stock Price Surge: Will the Trend Last?
Regency is well-poised to benefit from its strategically located portfolio of premium shopping centers, concentrated in affluent suburban areas and near urban trade areas where consumers have high spending power. Its focus on grocery-anchored shopping centers ensures stable revenues. REG has a high-quality open-air shopping center portfolio, with more than 80% grocery-anchored neighborhood and community centers. Six of its top 10 tenants are high-performing grocers.
Regency Centers’ has the best-in-class operators opening new locations in its high-quality centers.The company has numerous industry-leading grocers such as Publix, Kroger, Albertsons Companies (ACI - Free Report) , TJX Companies (TJX - Free Report) , Inc. and Amazon/Whole Foods as tenants. Anchor tenants (tenants renting spaces greater than or equal to 10,000 square feet) comprised 42.5% (based on pro-rata ABR) of its portfolio as of June 30, 2024. Regency Centers executed around 2.2 million square feet of comparable new and renewal leases in the second quarter.
To enhance its portfolio, REG has been undertaking acquisitions and developmental activities. In August 2024, Regency announced the opening of Oakley Shops at Laurel Fields, CA, a new ground-up development encompassing around 79,000 square feet of retail space, anchored by Safeway with 56,000 square feet. As of June 30, 2024, Regency’s in-process development and redevelopment projects had estimated net project costs of $578 million.
Regency Centers enjoys financial flexibility and focuses on further strengthening its balance sheet position. This retail REIT had nearly $1.2 billion of capacity under its revolving credit facility as of June 30, 2024. As of the same date, its pro-rata net debt and preferred stock-to-operating EBITDAre ratio was 5.3. The company has a well-laddered debt maturity schedule, aiming to have less than nearly 15% of total debt maturing in any given year. As of June 30, 2024, 88.1% of its wholly owned real estate assets were unencumbered, providing it easy access to the secured and unsecured debt markets.
Solid dividend payouts are the biggest attraction for REIT investors, and Regency Centers is committed to boosting shareholder wealth. In the last five years, the company has raised its dividend four times, and its dividend witnessed a CAGR of 3.24%. Therefore, given its solid operating platform, scope for growth and decent financial position compared with the industry, this dividend rate is expected to be sustainable over the long run.
The Zacks Consensus Estimate for Brixmor Property Group’s 2024 FFO per share has moved marginally northward over the past month to $2.13.
The Zacks Consensus Estimate for Phillips Edison & Company’s 2024 FFO per share has increased marginally over the past month to $2.42.
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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Regency Centers Up 16.1% in 6 Months: Will It Continue to Rise?
Shares of Regency Centers (REG - Free Report) have rallied 16.1% in six months, outperforming the industry's growth of 5.2%.
Regency Centers is one of the leading retail real estate investment trusts (REITs) in the United States. The company’s portfolio mainly consists of grocery-anchored community and neighborhood centers, ensuring dependable traffic.
Last month, Regency Centers reported second-quarter 2024 NAREIT funds from operations (FFO) per share of $1.06, which outpaced the Zacks Consensus Estimate of $1.02. Results reflected healthy leasing activity and a year-over-year improvement in the base rent. The company also raised its 2024 outlook.
Analysts seem bullish about this Zacks Rank #2 (Buy) company, with the Zacks Consensus Estimate for its 2024 FFO per share being raised marginally over the past week to $4.23.
Image Source: Zacks Investment Research
Factors Behind REG's Stock Price Surge: Will the Trend Last?
Regency is well-poised to benefit from its strategically located portfolio of premium shopping centers, concentrated in affluent suburban areas and near urban trade areas where consumers have high spending power. Its focus on grocery-anchored shopping centers ensures stable revenues. REG has a high-quality open-air shopping center portfolio, with more than 80% grocery-anchored neighborhood and community centers. Six of its top 10 tenants are high-performing grocers.
Regency Centers’ has the best-in-class operators opening new locations in its high-quality centers.The company has numerous industry-leading grocers such as Publix, Kroger, Albertsons Companies (ACI - Free Report) , TJX Companies (TJX - Free Report) , Inc. and Amazon/Whole Foods as tenants. Anchor tenants (tenants renting spaces greater than or equal to 10,000 square feet) comprised 42.5% (based on pro-rata ABR) of its portfolio as of June 30, 2024. Regency Centers executed around 2.2 million square feet of comparable new and renewal leases in the second quarter.
To enhance its portfolio, REG has been undertaking acquisitions and developmental activities. In August 2024, Regency announced the opening of Oakley Shops at Laurel Fields, CA, a new ground-up development encompassing around 79,000 square feet of retail space, anchored by Safeway with 56,000 square feet. As of June 30, 2024, Regency’s in-process development and redevelopment projects had estimated net project costs of $578 million.
Regency Centers enjoys financial flexibility and focuses on further strengthening its balance sheet position. This retail REIT had nearly $1.2 billion of capacity under its revolving credit facility as of June 30, 2024. As of the same date, its pro-rata net debt and preferred stock-to-operating EBITDAre ratio was 5.3. The company has a well-laddered debt maturity schedule, aiming to have less than nearly 15% of total debt maturing in any given year. As of June 30, 2024, 88.1% of its wholly owned real estate assets were unencumbered, providing it easy access to the secured and unsecured debt markets.
Solid dividend payouts are the biggest attraction for REIT investors, and Regency Centers is committed to boosting shareholder wealth. In the last five years, the company has raised its dividend four times, and its dividend witnessed a CAGR of 3.24%. Therefore, given its solid operating platform, scope for growth and decent financial position compared with the industry, this dividend rate is expected to be sustainable over the long run.
Other Stocks to Consider
Some other top-ranked stocks from the retail REIT sector are Brixmor Property Group (BRX - Free Report) and Phillips Edison & Company (PECO - Free Report) , each carrying a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Brixmor Property Group’s 2024 FFO per share has moved marginally northward over the past month to $2.13.
The Zacks Consensus Estimate for Phillips Edison & Company’s 2024 FFO per share has increased marginally over the past month to $2.42.
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.