The Zacks Analyst Blog Highlights:BankUnited, Agree Realty, Tractor Supply, AutoZone and Mattress Firm Holding
CHICAGO, Sept. 25, 2013 /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 the Agree Realty Corporation (NYSE:ADC-Free Report), Tractor Supply Company (Nasdaq:TSCO-Free Report), AutoZone, Inc. (NYSE:AZO-Free Report), Mattress Firm Holding Corp. (Nasdaq:MFRM-Free Report) and BankUnited, Inc. (NYSE:BKU-Free Report)
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Here are highlights from Tuesday's Analyst Blog:
Agree Realty Buys BJ's Wholesale Outlet for $10.6M
Consistent with its portfolio expansion plans, Agree Realty Corporation (NYSE:ADC-Free Report) disclosed the acquisition of Pa.-based BJ's Wholesale Club outlet for $10.6 million. The move depicts the company's motive to strengthen its tenant base of industry leading retailers.
Notably, with this high-end buyout, Agree Realty's year-to-date acquisition volume totals about $70 million. BJ's Wholesale Club, spanning 112,230 square feet, is positioned at Airport Road South in Allentown.
The acquisition of BJ's Wholesale Club outlet, which is serving the Airport Road South area over the past 20 years, offers Agree Realty the scope to enjoy steady revenues, going forward. Lately, Agree Realty has been on an acquisition spree. Earlier this month, the company purchased an outlet of a privately-owned American health club chain – LA Fitness – in Rochester, N.Y. for approximately $10.3 million.
Moreover, last month, Agree Realty shelled out $6 million to acquire four single tenant assets. Two of these are in Madisonville, Texas and Forest, Miss. and are leased to Tractor Supply Company (Nasdaq:TSCO-Free Report), which commands a large chain of retail stores. Among the other two properties, one is occupied by AutoZone, Inc. (NYSE:AZO-Free Report) in Sun Valley, Nev. and the other by Mattress Firm Holding Corp. (Nasdaq:MFRM-Free Report) in Baton Rouge, La.
Such opportunistic deals are expected to help Agree Realty to add tenants to its strong tenant base and extend ties with existing tenants as well as drive earnings in the future.
Agree Realty – which specializes in the acquisition and development of single tenant properties net leased to national and regional retail companies in the U.S. – currently owns a portfolio of 128 properties in 33 states, comprising roughly 3.8 million square feet of gross leasable space.
Agree Realty, at present, carries a Zacks Rank #3 (Hold).
BankUnited Upped to Outperform
On Sep 19, 2013, we upgraded our long-term recommendation on BankUnited, Inc. (NYSE:BKU-Free Report) to Outperform. Our decision rests on the company's impressive second-quarter earnings. Moreover, the company is conveniently positioned to grow both organically and inorganically based on its healthy liquidity levels.
The Rationale Behind the Upgrade
On Jul 24, BankUnited reported second-quarter 2013 earnings per share of 52 cents, substantially beating the Zacks Consensus Estimate of 43 cents. Results were primarily driven by growth in net interest income and a decline in operating expenses, partially offset by lower non-interest income. Further, growth in loan and deposit balances was the tailwind for the quarter.
The Zacks Consensus Estimate for 2013 advanced 10.6% to $1.88 per share over the last 60 days. Further, for 2014, the Zacks Consensus Estimate increased 8.3% to $1.82 per share over the same time period. Hence, BankUnited currently carries a Zacks Rank #1 (Strong Buy).
BankUnited is an attractive pick for yield-seeking investors. Earlier, in Feb 2012, the company had raised its cash dividend by 21% to 17 cents. Moreover, given the company's strong capital and balance sheet levels, it is well positioned to expand organically as well as through acquisitions. Further, management intends to set up additional branches in the New York metropolitan market through the remainder of 2013.
Robust capital deployment plans and increasing emphasis on the commercial loan portfolio will prove accretive to BankUnited's overall growth going forward. The company is well poised from the capital perspective as well. We expect BankUnited to continue building capital with the help of its earnings in order to meet the increasingly stringent capital requirements.
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