CHICAGO, June 28, 2013 /PRNewswire/ -- Today, Zacks Equity Research discusses the U.S. Real Estate Investment Trusts (REIT), including Kimco Realty Corporation (NYSE: KIM-Free Report), The Macerich Company (NYSE: MAC-Free Report), Acadia Realty Trust (NYSE: AKR-Free Report), HCP Inc. (NYSE: HCP-Free Report) and Health Care REIT, Inc. (NYSE: HCN-Free Report).
Industry: Estate Investment Trusts (REIT)
The broader Finance sector, of which REITs are a part, remains in excellent earnings shape. The first quarter 2013 results for the sector were impressive in terms of both beat ratios (percentage of companies coming out with positive surprises) and growth.
The earnings "beat ratio" was 73.4% while the revenue "beat ratio" was 51.9%. Total earnings for this sector were up 7.7%, slightly moderating from the 10.0% growth in the fourth quarter of 2012. Total revenues moved north 5.5% in the quarter versus 23.1% growth in the prior quarter.
Looking at the consensus earnings expectations for the rest of the year, we remain encouraged since earnings are expected to grow 19.1% in the second quarter, 7.6% in the third quarter and 27.6% in the fourth quarter, thereby registering full-year 2013 growth of 14.0%.
Retail REITs: Being a leader, the U.S. retail industry provides adequate growth prospects for these REITs. Despite the rise in online shopping through the Internet, mobile phones and tablets, it is the physical interaction that the millennial generation stills prefers while shopping. Hence, amid the technological advancements, in order to increase their market dominance, the retail industry keeps on reinventing, redesigning and revamping their physical stores.
With retail properties in premium locations, companies like Kimco Realty Corporation (NYSE: KIM-Free Report), The Macerich Company (NYSE: MAC-Free Report) and Acadia Realty Trust (NYSE: AKR-Free Report) remain our primary choices.
Healthcare REIT: Relatively immune to the macroeconomic problems, these REITs are expected to benefit from rising national health expenditures that are projected to grow 3.8% in 2013 and 7.4% in 2014, according to Centers for Medicare and Medicaid Services. Also, the federal agency projects average compounded annual growth rate of health expenditures of 6.2% over 2015 through 2021.
Moreover, though the forthcoming wave of retiring baby boomers is often cited as a threat to the U.S. economy, this is a boon for the healthcare sector as senior citizens spend 200% more than the average population.
Hence, we believe that Healthcare REITs like HCP Inc. (NYSE: HCP-Free Report) and Health Care REIT, Inc. (NYSE: HCN-Free Report) can capitalize on this trend.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
SOURCE Zacks Investment Research, Inc.