The Zacks Analyst Blog Highlights: MAA, JPMorgan Chase, KeyCorp, TOTAL S.A. and BP plc

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Mar 08, 2012, 09:30 ET

CHICAGO, March 8, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include MAA (NYSE: MAA), JPMorgan Chase & Co. (NYSE: JPM), KeyCorp (NYSE: KEY), TOTAL S.A. (NYSE: TOT) and BP plc (NYSE: BP).

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Here are highlights from Wednesday's Analyst Blog:

MAA REIT Secures Funds

MAA (NYSE: MAA), an apartment-only real estate investment trust (REIT), has recently closed on an unsecured term loan worth $150 million to increase its liquidity and repay its debt. The five-year term loan has a variable interest rate of LIBOR plus a spread of 1.40% to 2.15%, depending on the company's leverage levels.

J.P. Morgan Securities LLC, the investment banking division of JPMorgan Chase & Co. (NYSE: JPM) and Keybank National Association that provides various banking services in the U.S. under holding company KeyCorp (NYSE: KEY) acted as joint lead arrangers for the transaction.

MAA intends to utilize the proceeds from the funding to repay its outstanding debt on secured line of credit. The strategic ploy is aimed to maintain a conservative capital structure with sufficient cash to fuel its growth engine.

Since its inception in 1994, MAA has evolved as a publicly owned company from a portfolio of 6,000 apartments in the Mid-South area to a portfolio of 48,537 high-quality apartment homes spread across the Sunbelt region of the U.S.

The company typically divides its portfolio in two tiers – larger primary markets and lower population secondary markets. Secondary markets often have stable fundamentals due to limited new supply. Having a diversified presence in different types of markets helps mitigate risk and decreases volatility in the event of a slowdown in any one product type.

MAA's diversified market profile with its focus on solid employment markets of the Sunbelt region across both the high-growth primary markets and the less cyclical secondary markets provides a stable earnings platform for the company.

Furthermore, as 'echo boomers' (children of the baby boomer generation) opt to move out and more renters decide to part ways with families and roommates, the single-family home-ownership rate across the U.S. has witnessed a continuous decline and the demand for multi-family rental apartments has surged.

With new supply remaining muted until late 2013 or 2014, we expect the multifamily sector to remain comparatively stable in the coming quarters, as renting has emerged as the only viable option for customers who could not get mortgage loans or are unwilling to buy a house at present.

We maintain our 'Neutral' recommendation on MAA, which presently has a Zacks #3 Rank that translates into a short-term 'Hold' rating.

TOTAL Expands Operations in Yemen

Integrated oil and gas company TOTAL S.A. (NYSE: TOT) has acquired a 40% interest in the Block 3 exploration license from Papua New Guinea based Oil Search Limited. This acquisition will allow TOTAL to operate an area of 2,954 square kilometers (1,140.5 sq miles) in the eastern part of Marib Basin in Yemen.

TOTAL will develop the project jointly with three other partners. The others to assist TOTAL in this project are Austrian energy company OMV, state-owned Yemen General Corporation for oil and gas and the Czech Republic's MND.

We believe the acquisition of interest and subsequent plans of exploration in this basin are integral to TOTAL's aggressive drilling strategy which has allowed the company to expand its worldwide reach. Prior to this project the company acquired licenses to jointly operate a few blocks in the Lake Albert region in Uganda.

Although the company is silent about the financial consideration involved in the acquisition of the license in Yemen, we believe its cash-rich position will enable it to make an outright purchase of the interest. TOTAL ended the financial year with €14.02 billion ($18.15 billion) in cash.

TOTOL has been operating in Yemen for the past 25 years and its production here has grown to 86,000 barrels of oil equivalent (boe) per day in 2011. TOTAL is also the largest share holder of Yemen LNG with a 39.62% interest. The current acquisition will further increase its yield from Yemen.

TOTAL has been working relentlessly to extend its operations in Africa as well as in the Middle East. These regions provide a substantial portion of the company's total production. At the end of the fourth quarter, combined production from these two regions accounted for 52% of the total, which was 2,384 thousand barrels of oil equivalent (kboe) per day.

TOTAL has been targeting to increase its total production by 2.5% per year on an average between 2010 and 2015. However, in 2011, the company failed to reach the targeted production level that was static at prior-year levels. We believe the growth projects, expected to start in 2012, like Usan in Nigeria, Angola LNG and Bongkot South in Thailand, to name a few, will boost the oil major's production.

TOTAL S.A. currently retains a Zacks # 3 Rank, which translates into a short-term Hold rating. The company competes with BP plc (NYSE: BP).

France-based TOTAL is one of the largest publicly traded, globally integrated oil and gas companies based on production volumes, proved reserves and market capitalization. The company has exploration and production operations across five continents.

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