Shares of Cousins Properties Incorporated (CUZ) hit a new 52-week high touching $11.50 toward the end of the trading session on Thursday, Feb 20, 2014, as it gained momentum after reporting strong fourth-quarter 2013 results and the recent dividend hike announcement. The closing price of this real estate investment trust (REIT) on Feb 20 was $11.48, representing a solid year-to-date return of 13.7%. The trading volume for the session was 1.2 million shares.
Despite the strong price appreciation, this Zacks Rank #3 (Hold) stock has plenty of upside left, given the improving market fundamentals, strong fourth-quarter results and expected long-term earnings growth of 7.63%. Also, the company has recorded an average earnings surprise of 5.82% in 2013.
Growth Drivers
Cousins Properties reported a positive earnings surprise of 12.5% in fourth-quarter 2013, thanks to a more than two-fold rise in total revenue in the quarter. In particular, the company reported fourth-quarter 2013 funds from operations (FFO) per share of 18 cents, beating the Zacks Consensus Estimate by 2 cents and the year-ago figure by 4 cents.
Also, upbeat with the successful implementation of its strategic plan over the recent years, Cousins Properties decided to reward its stockholders. Accordingly, the company hiked its first-quarter cash dividend by 67% sequentially to 7.5 cents per share in Jan 2014. This boosts investors' confidence in the stock.
Notably, Cousins Properties’ portfolio is primarily concentrated in the high-growth Sun Belt markets, which due to their long-term demographic trends, is expected to exhibit above-average job growth. Its focus on building its business on a simpler platform, by specifically targeting trophy assets and opportunistic investments, ensures a steady revenue stream.
Other Stocks to Consider
Investors interested in the REIT-Equity Trust – Other industry may consider stocks like Liberty Property Trust (LRY), Public Storage (PSA) and STAG Industrial, Inc. (STAG). All these stocks carry a Zacks Rank #2 (Buy).
Note: FFO, a widely used metric to gauge the performance of REITs, are obtained after adding depreciation, amortization and other non-cash expenses to net income.
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