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Should You Add PS Business Parks (PSB) to Your Portfolio?
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Amid healthy fundamentals in the multi-tenant flex, office and industrial asset categories PS Business Parks Inc. continues to display solid strength and improving prospects.
In fact, last month, the company reported better-than-expected first-quarter 2017 funds from operations (“FFO”) per share. The company reported first-quarter 2017 FFO of $1.52 per share, surpassing the Zacks Consensus Estimate of $1.41. Moreover, the figure was 20.6% higher than the prior-year quarter tally of $1.26. The rise was attributable to higher net operating income (NOI), reduced interest expenses and savings from lower preferred distributions.
Total operating revenues came in at around $100.2 million, reflecting 4.4% growth from the prior-year period. The figure also surpassed the Zacks Consensus Estimate of $96 million. Its same Park NOI rose 8.9% year over year, mainly attributable to improving rental rates and occupancy.
Further, this Zacks Rank #2 (Buy) stock has risen over 19.9% over the past one year, compared with 1.0% decline experienced by the Zacks categorized REIT and Equity Trust - Other industry.
Why a Solid Choice?
Revenue Strength: PS Business Parks’ top line has been displaying strength for the past few quarters. Since third-quarter 2016 through first-quarter 2017, the company reported better-than-expected revenue figures in each of the quarters. Also, the company’s second-quarter 2017 revenue level is likely to grow 2.06% year over year. The same for full-year 2017 and 2018 are anticipated to increase 1.53% and 3.87%, respectively.
FFO per Share Growth: PS Business Parks witnessed 10.7% growth in funds from operations (FFO) per share over the last three to five years, against 2.72% of that of the industry. Additionally, FFO per share are estimated to grow at the rate of 9.07% for 2017, which is way ahead of the industry average of 2.15%.
Strong Leverage: The debt-to-equity ratio for PS Business Parks is 0.11 compared with the industry average of 0.83. This highlights greater financial stability for the company and lesser risk for shareholders.
Superior ROE: PS Business Parks’ Return on Equity (ROE) ratio is 15.85% compared with the industry average of 12.82%. This indicates that the company reinvests more efficiently compared to the industry.
Equity LifeStyle Properties currently has a long-term growth rate of 4.7%.
Omega Healthcare has been a steady performer, having surpassed the Zacks Consensus Estimate in the past four trailing quarters, with an average beat of 4.26%.
Moreover, Prologis’ estimates for 2017 FFO per share climbed 3.8% to $2.76, over the past 30 days.
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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Should You Add PS Business Parks (PSB) to Your Portfolio?
Amid healthy fundamentals in the multi-tenant flex, office and industrial asset categories PS Business Parks Inc. continues to display solid strength and improving prospects.
In fact, last month, the company reported better-than-expected first-quarter 2017 funds from operations (“FFO”) per share. The company reported first-quarter 2017 FFO of $1.52 per share, surpassing the Zacks Consensus Estimate of $1.41. Moreover, the figure was 20.6% higher than the prior-year quarter tally of $1.26. The rise was attributable to higher net operating income (NOI), reduced interest expenses and savings from lower preferred distributions.
Total operating revenues came in at around $100.2 million, reflecting 4.4% growth from the prior-year period. The figure also surpassed the Zacks Consensus Estimate of $96 million. Its same Park NOI rose 8.9% year over year, mainly attributable to improving rental rates and occupancy.
Further, this Zacks Rank #2 (Buy) stock has risen over 19.9% over the past one year, compared with 1.0% decline experienced by the Zacks categorized REIT and Equity Trust - Other industry.
Why a Solid Choice?
Revenue Strength: PS Business Parks’ top line has been displaying strength for the past few quarters. Since third-quarter 2016 through first-quarter 2017, the company reported better-than-expected revenue figures in each of the quarters. Also, the company’s second-quarter 2017 revenue level is likely to grow 2.06% year over year. The same for full-year 2017 and 2018 are anticipated to increase 1.53% and 3.87%, respectively.
FFO per Share Growth: PS Business Parks witnessed 10.7% growth in funds from operations (FFO) per share over the last three to five years, against 2.72% of that of the industry. Additionally, FFO per share are estimated to grow at the rate of 9.07% for 2017, which is way ahead of the industry average of 2.15%.
Strong Leverage: The debt-to-equity ratio for PS Business Parks is 0.11 compared with the industry average of 0.83. This highlights greater financial stability for the company and lesser risk for shareholders.
Superior ROE: PS Business Parks’ Return on Equity (ROE) ratio is 15.85% compared with the industry average of 12.82%. This indicates that the company reinvests more efficiently compared to the industry.
Other Stocks to Consider
Other similarly-ranked stocks in the REIT space include Equity LifeStyle Properties, Inc. (ELS - Free Report) , Omega Healthcare Investors, Inc. (OHI - Free Report) and Prologis, Inc. (PLD - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Equity LifeStyle Properties currently has a long-term growth rate of 4.7%.
Omega Healthcare has been a steady performer, having surpassed the Zacks Consensus Estimate in the past four trailing quarters, with an average beat of 4.26%.
Moreover, Prologis’ estimates for 2017 FFO per share climbed 3.8% to $2.76, over the past 30 days.
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.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>