Duke Realty Hits New 52-Week High on Strong Portfolio Growth


Shares of Duke Realty Corporation (DRE) touched a new 52-week high of $18.67 on Aug 19. Closing the session at $18.48, the stock returned 32.5% in a year’s time. The trading volume for the session was 1,762,930 shares.

Despite the strong price appreciation, this Zacks Rank #3 (Hold) stock has plenty of upside left, given the positive estimate revisions witnessed over the past 60 days. Further, long-term expected earnings per share growth rate for this real estate investment trust (:REIT) presently stands at 4.1%.

Growth Drivers

The recent spate of portfolio-expansion efforts and strong second-quarter 2014 results primarily drove the stock price.

On Aug 18, Duke Realty announced a new industrial development project on an 18.1 acre site at 1341 Enterprise Drive in I-55 submarket in Romeoville. Just a week prior to this, the real estate investment trust (:REIT) announced a joint venture with Browning Investments for development of a new industrial building in AllPoints Midwest. Improving fundamentals in the U.S. industrial market is aiding Duke Realty in accomplishing its portfolio-expansion activities.

On Jul 30, Duke Realty came out with second-quarter 2014 funds from operations (:FFO) of 30 cents per share, beating the Zacks Consensus Estimate by a penny. Further, FFO came in 3 cents above the prior-year quarter figure. Results were driven by a rise in revenues and occupancy growth.

Estimate Revisions Show Potency

Over the last 60 days, the Zacks Consensus Estimate for 2014 has inched up 0.9% to $1.17 per share. For 2015, the estimate moved up 0.8% to $1.24 per share over the same time frame.

Some better-ranked REIT stocks include Ashford Hospitality Trust, Inc. (AHT), Government Properties Income Trust (GOV) and W. P. Carey Inc. (WPC). All these stocks carry a Zacks Rank #1 (Strong Buy).

Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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