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Is Now A Good Time To Buy Kimco Realty?

If you go by an increase in dividend yield, the answer may be yes. Kimco Realty Corp (NYSE: KIM) is now paying its investors 3.5%.

Combined with a reasonable, lower than the stock market in general, price to funds from operations ratio of 12.96, the real estate investment trust starts to look appealing.

How it may weather an environment of inflation and rising interest rates would be questions investors would have to ask. This is true of most investments right now, of course, but it’s especially true of REITs which depend on how those factors might affect the consumers who might be cutting back on spending.

Kimco Realty is one of the oldest real estate investment trusts in existence, publicly traded on the New York Stock Exchange since 1991, a tribute to the success of the concept and to management’s successful execution. The REIT owns all or part of more than 500 shopping centers nationwide that are mostly located in areas of significant population. As the value of the property rises and as lease rates rise, the business is designed for steady profitability.

According to the company’s website its portfolio is “primarily concentrated in first-ring suburbs of the top major metropolitan markets, including those in high barrier-to-entry coastal markets and rapidly expanding Sunbelt cities, with a tenant mix focused on essential, necessity-based goods and services that drive multiple shopping trips per week.”

That’s where higher gas-at-the-pump costs come in and also where higher interest rates might affect things.

Analysts at Jeffries & Company have a “buy” rating on Kimco Realty from June 30, 2022 and raised their price target on the REIT from $23 to $28. With the price currently sitting at $19.82, a hit of the lower end of that target would mean a gain of 13.80%. This follows Credit Suisse, which 7 days earlier initiated a “buy” on Kimco with the same basic price target of $23.

Not everyone is that positive: in May, a Morgan Stanley analyst cut their price target for the REIT from $26.50 to $25 and maintain a “neutral” rating on Kimco.

Noted hedge fund managers Paul Tudor Jones, Jim Simmons and Joel Greenblatt like the units. They are all recent buyers of the real estate investment trust, according to regulatory filings dated March 31st, 2022.

Kimco is set to announce results for the 2nd quarter on July 28th before the open of trading.

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