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Why is Buy Strategy Apt for Kimco Realty (KIM) Right Now?

Kimco Realty Corp. KIM, the owner and operator of open-air, grocery-anchored shopping centers and mixed-use assets, has properties in the drivable first-ring suburbs of its top 20 major metropolitan Sunbelt and coastal markets. Capitalizing on these, this REIT continues witnessing a decent leasing activity and healthy rent collections.

The grocery component has been the saving grace of the retail REITs so far and 79.4% of Kimco’s annual base rent came from the grocery-anchored centers in the third quarter. KIM also has a highly diversified tenant base, led by a healthy mix of essential, necessity-based tenants and omni-channel retailers. Given the strength of its retailers with a developed omni-channel presence, KIM remains well poised to navigate the challenging times.

Apart from its focus on the grocery and home-improvement tenants, Kimco emphasizes the mixed-use assets clustered in the strong economic metropolitan statistical areas. Particularly, KIM is targeting higher net asset value through a select collection of mixed-use projects, redevelopments and an active investment management.

Though dwindling traffic at retail properties, store closures and higher e-commerce adoption remain concerns, balance sheet-strengthening moves help Kimco sail through any mayhems and bank on growth scopes.

Kimco exited the third quarter of 2021 with cash and cash equivalents of $483.5 million. It had more than $2.4 billion of immediate liquidity at the end of the reported quarter, including full availability under its $2-BILLION unsecured revolving credit facility. Further, KIM has strong investment grade ratings of BBB+ from S&P and Baa1 from Moody’s, allowing it to borrow at an advantageous rate.

Additionally, the recent estimate revision trend indicates a favorable outlook as the Zacks Consensus Estimate for 2021 funds from operations (FFO) per share has been revised marginally upward in the past month.

Shares of this presently Zacks Rank #1 (Strong Buy) player have gained 19.1% over the past six months against the industry’s decline of 2.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Image Source: Zacks Investment Research

Other Stocks to Consider

Some other top-ranked stocks from the REIT sector are Kite Realty Group Trust KRG, EPR Properties EPR and Federal Realty Investment Trust FRT.

The Zacks Consensus Estimate for Kite Realty’s 2021 FFO per share has been raised 2.2% in the past two months. Over the last four quarters, KRG’s FFO per share surpassed the consensus mark thrice and was in line with the same in the remaining quarter, the average beat being 4.7%.

Currently, KRG sports a Zacks Rank of 1. Shares of Kite Realty have appreciated 7.3% in the past six months.

The Zacks Consensus Estimate for EPR Properties’ 2021 FFO per share has been raised 3.3% over the past two months. Over the last four quarters, EPR’s FFO per share surpassed the consensus mark on three occasions and missed the mark on the remaining one, the average surprise being 4.4%.

EPR Properties carries a Zacks Rank #2 (Buy) at present. Shares of EPR have declined 11.6% in the past six months.

Federal Realty carries a Zacks Rank of 2 at present. Shares of FRT have gained 15.5% in the past six months.

The Zacks Consensus Estimate for Federal Realty’s 2021 FFO per share has been raised 1.5% over the past month. Over the last four quarters, FRT’s FFO per share surpassed the consensus mark on all occasions, the average being 15.2%.

Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.

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Kimco Realty Corporation (KIM): Free Stock Analysis Report
Federal Realty Investment Trust (FRT): Free Stock Analysis Report
Kite Realty Group Trust (KRG): Free Stock Analysis Report
EPR Properties (EPR): Free Stock Analysis Report
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