Should You Hold Essex Property (ESS) In Your Portfolio?
Zacks Investment Research | May 29, 2017 08:39AM ET
We updated our research report on Essex Property Trust, Inc. (NYSE:ESS) on May 26.
Late in April, backed by robust growth in revenues, Essex Property delivered a better-than-expected core funds from operations (“FFO”) per share for first-quarter 2017. The company reported core FFO per share of $2.94 for the quarter, beating the Zacks Consensus Estimate of $2.89. Core FFO per share also improved 9.7% from the year-ago quarter figure of $2.68.
Total revenue of $335.4 million in the quarter exceeded the Zacks Consensus Estimate of $332.8 million and was up 6.7% year over year.
Per management, the first-quarter 2017 results “reflect a recovery from challenging conditions experienced in the fourth quarter”. In addition, results were solid in the Seattle portfolio and the company witnessed better pricing power in Northern California amid lesser deliveries of apartment supply.
Further, the company raised its guidance for 2017. It projects core FFO per share in the range of $11.56–$11.96 from $11.48–$11.88 guided earlier, indicating an increase of $0.08 at the mid-point. Essex Property revised its estimates for same-property gross revenue growth to 3.0–4.0% from the prior range of 2.75–3.75%. Same-property NOI is now guided in the band of 2.8–4.6% from the previous range of 2.5–4.25%.
Moving ahead, with a strong property base and solid balance sheet, Essex Property is likely to leverage on favorable demographic trends in its markets. Moreover, the company has a 23-year history of increasing cash dividend, with the most recent announcement of dividend hike of 9.4% in Feb 2016.
Also, shares of Essex Property outperformed the Zacks categorized Zacks Investment Research
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