Post Properties - Growth & Income
05 Ottobre 2012 - 2:00AM
Zacks
Post Properties Inc. (PPS) raised its guidance for 2012
during its second quarter report and offers a dividend yield of
2.1%, making it a solid pick for investors seeking both growth and
income. Earnings for this Zacks #1 Rank (Strong Buy) multifamily
REIT (real estate investment trust) are expected to grow 33.9% in
2012.
Strong Second Quarter
Post Properties reported strong second quarter results on July
30, with a 43.3% rise in FFO (fund from operations) to $39.7
million. On a per share basis, FFO increased 32.7% year over year
to 73 cents, beating the Zacks Consensus Estimate by 22.4%.
Total revenues surged 9.0% year over year to $82.2 million.
Same-store quarterly revenues increased 7.8% to $75.1 million.
Same-store net operating income (NOI) increased 10.4% to $46.2
million, primarily due to a 6.5% hike in average rental rates to
$1,341 per apartment unit. Average same-store economic occupancy
remained relatively high at 96.1%, compared to 95.1% in the
year-ago quarter.
Outlook Raised
Based on the superior second quarter results, management raised
its FFO guidance for 2012 to between $2.50 and $2.60 per share from
the earlier range of $2.26 – $2.38. The guidance is based on
same-store revenue growth expectations of 6.25% - 6.75% and
same-store NOI growth of 7.20% - 8.20%.
Analysts have revised their earnings estimate upward for both
2012 and 2013, driving the stock to a Zacks #1 Rank (Strong Buy).
Over the past 90 days, the Zacks Consensus Estimate for 2012
increased 9.6% to $2.62, implying year-over-year growth of 33.9%.
For 2013, the Zacks Consensus Estimate has increased 6.8% to $2.67
in the same timeframe.
Post Properties is scheduled to report again on October 29. The
Zacks Consensus Estimate for the quarter is currently at 62 cents
per share.
Dividend Payout
Post Properties paid a dividend of 25 cents per share in the
second quarter of 2012. The quarterly dividend represents a 25.0%
increase from the payout in the year-ago quarter. The current
dividend payment affirms a yield of 2.1%.
Premium Valuation
The valuation metrics for Post Properties are at a premium on a
price-to-earnings (P/E) and price-to-sales (P/S) basis. Shares are
currently trading at a forward P/E of 18.47x versus the peer group
average of 17.67x. On a P/S basis, shares are trading at 8.24x
versus 7.74x for the peer group average. A healthy earnings growth
prospect warrants the premium valuation of the company. Its PEG
ratio is 1.48, based on a 5-year FFO growth rate of 12.5%.
Since December 7, 2011, Post Properties shares have consistently
fared better than the simple moving average for 200 days or SMA
(200). In addition, the stock has outperformed the S&P 500
index since November 18, 2010.
![](http://www.zacks.com/images/upload_dir/1349373083.jpg)
With a favorable supply/demand relationship, rising earnings
estimates, robust growth projections and a decent dividend yield,
Post Properties offers an enticing upside potential going forward.
In addition, a continued focus on some of the country’s premium
markets in major metropolitan areas bodes well for its long-term
growth.
Headquartered in Atlanta, Georgia, Post Properties develops and
operates luxury multi-family apartment communities under the
renowned Post brand since its formation in 1971. The company
presently operates in 10 markets across the U.S., with ownership
interests in 21,982 apartment units in 59 communities. These
include 1,471 apartment units in four communities held in
unconsolidated entities and 1,810 apartment units in six
communities under development or in lease-up stage. The company
currently has a market cap of $2.6 billion.
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POST PPTYS INC (PPS): Free Stock Analysis Report
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