24/7 Wall St. » CPT

Expected Upside in Lifestyle-Oriented REITs (HCN, SNH, UDR, ESS, CPT, RLJ, DRH, HHC, GGP)

Paul Ausick — Thu, 10 Nov 2011 19:28:00 +0000

The number and types of real estate investment trusts (REITs) is both large and varied, and, thus, better taken in smaller chunks. Our focus today hits those REITs that offer senior living centers, apartment buildings, and some mixed-use properties.

We’ve also culled some stocks from today’s list because either they don’t pay a dividend — or pay a low dividend for a REIT — or the company has already surpassed its current median target price. The companies we’ve selected are Health Care REIT, Inc. (NYSE: HCN), Senior Housing Properties Trust (NYSE: SNH), UDR, Inc. (NYSE: UDR), Essex Property Trust Inc. (NYSE: ESS), Camden Property Trust (NYSE: CPT), RLJ Lodging Trust (NYSE: RLJ), Diamondrock Hospitality Co. (NYSE: DRH), The Howard Hughes Corp. (NYSE: HHC), and General Growth Properties Inc. (NYSE: GGP).

Howard Hughes Corp. is not a REIT, but its operations are a near-identical fit with those of the trusts. It does not pay a dividend, but its upside potential is significant and we include it here as a “quasi-REIT.”

All data from Yahoo! Finance, and share prices were collected in the early afternoon today.

Health Care REIT, Inc. (NYSE: HCN) has a median target price of $53.00 from 13 brokers. Shares are trading today at $49.61, for an implied gain of $3.39, or 7%. HCN’s forward P/E is 13.11 and the company pays a dividend yield of 5.6%. The stock’s 52-week trading range is $41.03-$55.21, and at today’s price that’s about 21% above its 52-week low and 10% below the 52-week high.

HCN today completed a secondary offering of 12.65 million shares priced at $50/share. The company raised $632.5 million, which it plans to use for future investment, to pay down debt, and for general corporate purposes. Shares had been trading near the target price in advance of the offering. The attractive dividend yield makes the stock worth considering.

Senior Housing Properties Trust (NYSE: SNH) has a median target price of $24.00 from 7 brokers. Shares are trading today at $21.27, for an implied gain of $2.73, or 13%. SNH’s forward P/E is 7.31 and the company pays a dividend yield of 7%. The stock’s 52-week trading range is $19.09-$24.66, and at today’s price that’s about 11% above its 52-week low and 14% below the 52-week high.

Senior Housing Properties pays the highest dividend of any stock in this group and there is still headroom a nice implied gain. The 52-week high is barely above the target price, which could indicate a target price boost soon.

UDR, Inc. (NYSE: UDR) has a median target price of $27.00 from 18 brokers. Shares are trading today at $24.31, for an implied gain of $2.69, or 11%. UDR’s forward P/E is 17.12 and the company pays a dividend yield of 3.2%. The stock’s 52-week trading range is $20.04-$27.26, and at today’s price that’s about 21% above its 52-week low and 11% below the 52-week high.

UDR has been able to raise its rents due to its strategy of buying apartment properties in cities where job growth is better than average and higher priced housing is performing better.

Essex Property Trust Inc. (NYSE: ESS) has a median target price of $145.00 from 20 brokers. Shares are trading today at $135.09, for an implied gain of $9.91, or 7%. Essex’s forward P/E is 20.9 and the company pays a dividend yield of 3%. The stock’s 52-week trading range is $105.60-$148.44, and at today’s price that’s about 28% above its 52-week low and 9% below the 52-week high.

Essex’s target price is lower than its 52-week high and its forward P/E is higher than average as well, indicating that the stock could be priced at very near its full value. The 7% implied gain is further evidence that expectations for growth are not all that rosy.

Filed under: REIT Tagged: CPT, DRH, ESS, GGP, HCN, HHC, RLJ, SNH, UDR

Top 10 Pre-Market Analyst Calls (AW, CPT, ESPG, GSIC, GE, EFII, IR, MVSN, SAI, UPS)

247wallst — Thu, 10 Jan 2008 09:04:46 +0000

These aren’t the only analyst calls moving stocks this morning, but these are the ones that 247WallSt.com is focusing on:

Allied Waste (AW) downgraded to Neutral at JPMorgan.
Camden Property (CPT) downgraded to Peer Perform at Bear Stearns; downgraded to Underweight at JPMorgan.
eSpeed (ESPD) raised to Buy from Neutral at Goldman Sachs.
Electronics for Imaging (EFII) downgraded to Market Perform at BMO Capital and downgraded to Underperform at Collins Stewart.
General Electric (GE) lowered price targets to $38 from $42 at Goldman Sachs, although it maintained a Buy rating.
GSI Commerce (GSIC) raised to Outperform at Bear Stearns.
Ingersoll Rand (IR) raised to Overweight at Lehman.
Macrovision (MVSN) raised to Buy at Jefferies.
SAIC (SAI) raised to Overweight at JPMorgan.
UPS (UPS) raised to Outperform at Bear Stearns.

Jon C. Ogg
January 10, 2008

The Day In Stock Buybacks (SMTC, ASI, EQR, DFS, LCUT, IBM, CPT)

247wallst — Mon, 03 Dec 2007 17:59:58 +0000

Semtech (NASDAQ:SMTC) has purchased a total of 9,836,066 shares of its common stock for an aggregate price of $169.4 million under an accelerated buyback plan; it intends to resume purchasing shares of its common stock under its existing stock repurchase program, under which approximately $50.3 million of remaining authority exists.

CMGI Inc. (NASDAQ:CMGI) noted along with its earnings that it had spent $8 million over the last quarter of its $50 million share buyback plan.

American Safety Insurance Holdings Ltd. (NYSE:ASI) has approved a buyback program for up to 500,000 shares of common stock. This is only about $9.5 million at current prices, and the company’s market cap is $204 million.

Equity Residential (NYSE: EQR) has authorized an additional $500 million to be used in its share repurchase program. Since the beginning of 2007, the company has repurchased and retired 26,694,346 of its common shares at an average price of $44.88 per share for an aggregate purchase of approximately $1.2 billion. Approximately $3.8 million currently remains available under the $500 million program previously announced.

Discover Financial Services (NYSE:DFS) will record a non-cash impairment charge related to its Goldfish MasterCard and Visa credit card business in the United Kingdom in the quarter ending Nov. 30, 2007 estimated as approximated $422 million in goodwill writedowns. Separately, the company has approved a share repurchase program for up to $1 billion of its common stock through November 30, 2010.

Lifetime Brands, Inc. (Nasdaq: LCUT) will close 30 underperforming outlet stores and its Board of Directors authorized an increase in the amount of its stock repurchase program to $40 million from $20 million. Its market cap is $164 million.

IBM (NYSE: IBM) announced that it plans to repurchase up to $1 billion of its outstanding common stock in open market transactions by the end of February 2008 rather than its original plans for March and April of 2008, are in addition to a $12.5 billion accelerated share repurchase announced earlier this year.

Camden Property Trust (NYSE:CPT) updated progress made on its stock repurchase program: During November 2007, Camden repurchased 1.6 million common shares at an average price per share of $52.03, for a total of $81.9 million. Year-to-date, Camden has now repurchased 2.9 million shares of common stock at an average price per share of $57.60, for a total of $168.4 million.

Jon C. Ogg
December 3, 2007

Pre-Market Analyst Calls (November 5, 2007)

247wallst — Mon, 05 Nov 2007 07:46:03 +0000

ACA cut to Underperform at Credit Suisse.
ACW raised to Neutral at UBS.
AMSC started as Buy at Jefferies.
ATPG cut to Underperform at RBC.
BSC cut to Equal Weight at Lehman.
BSY cut to Neutral at Merrill Lynch.
CNP raised to Buy at Jefferies.
CPT cut to Neutral at B of A.
DRE cut to Neutral at UBS.
FSLR started as Sector Perform at CIBC.
GLF raised to Buy at Jefferies.
GNA raised to Outperform at CIBC.
HD cut to Hold at Deutsche Bank.
LLY cut to Underweight at HSBC.
LOW cut to Hold at Deutsche Bank.
MER cut to Equal Weight at Lehman.
NLC raised to Neutral at UBS.
PDGI raised to BUy at Jefferies.
PVTB raised to Overweight at JPMorgan.
TUES raised to Outperform at Piper Jaffray.
WCG raised to Buy at Jefferies.
WST raised to Buy at UBS.

Jon C. Ogg
November 5, 2007