Colony Credit (CLNC) Stock Jumps 9%: Will It Continue to Soar?
Colony Credit Real Estate (CLNC) shares soared 9% in the last trading session to close at $9.34. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 3.5% gain over the past four weeks.
The increased optimism can be attributed to Colony Credit’s better-than-expected first-quarter 2021 results, fueled by robust mortgage originations. Also, the company’s portfolio transition to floating-rate first mortgages and the reduction of exposure to other investment types are reasons to be optimistic about the stock.
Moreover, it announced a 40% hike in second-quarter dividends from 10 cents to 14 cents, supported by cost savings from internalization and new origination activity. The dividend will be paid out on Jul 15 to common stockholders of record as of Jun 30, 2021.
It is well known that solid dividend payouts are the biggest enticement for investors in real estate investment trusts (REIT) and, hence, the latest divined hike has increased investor confidence in the stock.
Price and Consensus
This REIT is expected to post quarterly earnings of $0.14 per share in its upcoming report, which represents a year-over-year change of -46.2%. Revenues are expected to be $19.8 million, down 20.6% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Colony Credit, the consensus EPS estimate for the quarter has been revised 30% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on CLNC going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
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COLONY CREDIT REAL ESTATE, INC. (CLNC) : Free Stock Analysis Report
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