Starwood and MGI Properties will be dropped from
the Morgan Stanley REIT index following the close of
trading January 15th. Four REITs will be added including
PZN, La Salle Hotel Properties, Philips International
Realty and Host Marriott.
When I looked around business internet sites not
to long ago they just indicated "n/a" for estimates.
Zacks shows 11 analyst's reporting the information too
for their $2.76 average estimate.We should see a
$2.40 dividend out of that don't you think? If so: For
'99 @$2.40/$22.50=10.6%.....for '00 (with 20% growth)
@$2.90/$22.50=13%....for '01 @3.48/$22.50=15.6%....and for '02 (closer
then we think)@$4.17/$22.50=18.50%. I guess I can live
As newMK says, "amazing what you can
find on the internet". And it's getting better and
better. Maybe I go long some AMZN.....not.
On November 9th, NationsBank/Montgomery (NBM)
published a research report on Prison Realty Trust. NBM was
acting as advisor to CCA & PZN on the merger. NBM
estimates there will be 106 million fully diluted shares as
of January 1, 1999. They are estimating a quarterly
dividend of $.56 per share for the first three quarters of
1999 and $.59 for the fourth quarter of 1999 ($2.27
for the year). In addition to the quarterly dividend
referenced above, PZN will pay a one-time special dividend
estimated at $2.60 per share. 1999 FFO estimate is $2.83.
1998 FFO estimate is $2.27. The twelve month price
target for PZN is $32 based on a multiple of less than
11 1/2 times 1999 FFO estimate of $2.83. The average
specialty REIT trades at 11.4 times estimated 1998 FFO and
has an annual FFO per share growth rate of
approximately 15%. Thus, with an expected annual FFO per share
growth rate of 25%, PZN likely deserves a higher
multiple especially considering the recession-proof nature
of the corrections industry.
Walker published a BUY recommendation on November 6th.
1999 FFO estimate is $2.79. They estimate an FFO
growth rate of 22%, a special dividend of $2.50 per
share to be paid in Decemer 1999 and a twelve-month
price target of $33 per share. Year 2000 FFO estimate
is $3.46. (This particular report has one of the
most interesting sentences I have seen in my 28 years
in the investment business, to wit:
stock price was also hurt by a number of operating
incidents -- escapes, murders, assaults -- that occurred
following the merger announcement.")
and Thornton (whoever they are) have a 1999 FFO
estimate of $2.75 with $.62 in the first quarter, $.64 in
the second quarter, $.70 in the third quarter and
$.79 in the fourth quarter. They are estimating a
special dividend in the fourth quarter of $2.50 to $3.00
per share. This report was published on November
Hope the above is useful to all.
Thanks for the Analyst's information.
Unfortunately this stock is in the "Show Me" category so
investors will need to see results before pressure on the
stock price subsides. I still think it will take one or
two dividend checks for the stock to begin to realize
It probably a little burr in the pants of Wall
Street that Doc arranged his own equity financing with
HSBC. AND it comes in as regular as money from home
too. Each month.
The way Doc's going he'll only
need the Wall Street firms if he's looking for a free
lunch and invites one of the turkey's to come in and
pick up the tab.
Notice how Smith,Barney and JC
Bradford just picked up research on CPV, of course with a
"buy". Kissy,kissy. Expect a secondary there
I've mentioned this in other places but I do find it
very interesting how Bob and Doc are cutting out Wall
Street and their little monpoly down there. For years
places like GE relied on Investments Bankers(IB) to
underwrite their commercial paper. Now they place it direct
with money market funds. More and more companies are
"cutting out the middleman". Wall Street in the past has
held research over the companies head to get IB
business. BUt more and more firms are realizing, IMO, it's
not worth the price. The IB's are starting to hit a
point, IMO, they have to do research just to justify
anyone talking to them.
I've read that REITs can also offer a tax
advantage to investors in the sense that as much as half of
their cash distributions (dividends) may be
sheltered.....does anybody have any information on this and whether
PZN dividends qualify?
Your sharing your info regarding what NB
Montgomery Securities (NBMS), Legg Mason (LM), and Putnam,
Lovell and Thornton (PL&T) had to say re: PZN a couple
of months ago is appreciated.
If PZN began
1999 with 101.9 million fully diluted shares
outstanding at say, $23 per share and NBMS expects a 12 month
target of $32 while LM is looking at $33, on an assumed
straight-line appreciation basis, the averaged price for 1999
would be on the order of $28.
If, as I
understood what Doc had to say about HSBC's $600 million
investment for FY99 being in equity, @ an averaged price of
$28/share, its $600 M should buy it about 21+ million shares
If PZN is starting out 1999 with
101.9 million shares outstanding, it seems to me it
should finish up 1999 with about 123+ million fully
diluted shares outstanding.
How does NBMS come up
with only 106 million fully diluted shares
Is only about a fifth of HSBC's $600 million FY99
investment to be in equity and the bulk on debt? Why is this
not adding up?
My question was, "Can you give me a range for the
numerical factor that relates EPS to FFO?"
to what IR had been told by Vida Carroll, PZN's CFO
& Sec.-Treas., historically, it's run between 80%
Vida said that The Street's consensus
opinion for PZN's FY99 FFO is running about $2.65 to
$2.70 (Yes, I'm aware that Zacks is currently showing
$2.76 but that is what I was told she told IR). If you
multiply those FFO numbers by 0.80 to 0.85, it should tell
you what the commensurate range for EPS would be. (It
looks like about 2.12 on the low end, to about 2.30 on
the high end.)
portion of REIT distributions, if applicable, will be
identified as "% Return of Capital" on the 1099 form. This
portion is not taxable as dividend income, but you have
to reduce the cost basis of the investment by that
amount. You will pay Uncle Sam one way or the other,
since the REIT doesn't.
At the above url, there is a
section where all REIT 1099's are reported. It has some
1998 figures already reported for a few REIT's.
is a REIT and as such, a portion of their cash
distributions may be "sheltered."
Check out the above url
for general info on REIT's. It is not a "commercial"