Shares of SL Green Realty Corp. (SLG) hit a new 52-week high, touching $100.00 toward the starting of the trading session on Feb 26, 2014, as it gained momentum following strong fourth-quarter 2013 results. The closing price of this real estate investment trust (REIT) on Feb 26 was $98.97, representing a solid year-to-date return of 7.6%. The trading volume for the session was 647,814 million shares.
Despite the strong price appreciation, this Zacks Rank #3 (Hold) stock has plenty of upside left, given the improving market environment, company fundamentals and expected long-term funds from operations (FFO) growth of 6.22%.
Growth Drivers
Keeping its winning streak alive, SL Green came up with impressive results yet again in the fourth quarter. The company reported fourth-quarter 2013 FFO of $1.38 per share, beating the Zacks Consensus Estimate by 3 cents and the prior-year quarter figure by 24 cents. The results came on the back of notable operating portfolio performance and successful execution of strategic portfolio enhancement activity.
Notably, SL Green is seeking to tap opportunities in New York City’s premium locations with its retail investments complementing its core office and structured finance businesses. In particular, the expansion in the renowned New York City retail corridor in the fourth quarter was commendable.
In addition, SL Green had a decent balance sheet position with $206.7 million of cash and cash equivalents as of Dec 31, 2013. Also, the company has recorded an average earnings surprise of 2.58% in the past four quarters of 2013.
Estimate Revisions Show Potency
Over the last 30 days, the Zacks Consensus Estimate for 2014 FFO per share upped by 2 cents to $5.66 per share. Similarly, for 2015, it moved north by 4 cents to $6.03 per share.
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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