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Cousins Properties Upgraded to Buy

Zacks Equity Research

On Nov 2, 2013, Zacks Investment Research upgraded Cousins Properties Incorporated (CUZ) – a real estate investment trust (:REIT) – to a Zacks Rank #2 (Buy). This was based on the company’s better-than-expected third-quarter 2013 results.

Why the Upgrade?

On Oct 30, 2013, Cousins Properties reported third-quarter 2013 funds from operations (:FFO) per share of 11 cents, beating the Zacks Consensus Estimate by a penny. This was driven by increase in revenues as well as occupancy and leasing gains. Total revenue for the quarter jumped 32.6% year over year to $52.1 million and also substantially exceeded the Zacks Consensus Estimate of $42 million.

Notably, Cousins Properties’ focus on building its business on a simpler platform, by specifically targeting trophy assets and opportunistic investments, ensures a steady revenue stream. In this context, the Texas-portfolio acquisition in the third-quarter 2013, the largest in the company’s history is noteworthy. Moreover, Cousins Properties maintains a flexible balance sheet with ample liquidity that enables it to capitalize on acquisition opportunities to fuel its growth engine.

As a result of these bullish factors, the tendency for an upward estimate revision has been obvious in recent times. Over the last 7 days, the Zacks Consensus Estimate for 2013 FFO per share rose 6% to 53 cents. Also, for 2014, the Zacks Consensus Estimate for FFO per share rose1.5% to 68 cents.

Other Stocks to Consider               

Other well-performing REITs include DuPont Fabros Technology, Inc. (DFT), Getty Realty Corp. (GTY) and Parkway Properties Inc. (PKY). 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.

Read the Full Research Report on CUZ
Read the Full Research Report on DFT
Read the Full Research Report on PKY
Read the Full Research Report on GTY

Zacks Investment Research