Advertisement
Canada markets closed

  • S&P/TSX

    21,885.38
    +11.66 (+0.05%)
     

  • S&P 500

    5,048.42
    -23.21 (-0.46%)
     

  • DOW

    38,085.80
    -375.12 (-0.98%)
     

  • CAD/USD

    0.7324
    +0.0026 (+0.36%)
     

  • CRUDE OIL

    83.80
    +0.99 (+1.20%)
     

  • Bitcoin CAD

    88,378.94
    +1,110.62 (+1.27%)
     

  • CMC Crypto 200

    1,394.91
    +12.34 (+0.89%)
     

  • GOLD FUTURES

    2,344.40
    +6.00 (+0.26%)
     

  • RUSSELL 2000

    1,981.12
    -14.31 (-0.72%)
     

  • 10-Yr Bond

    4.7060
    +0.0540 (+1.16%)
     

  • NASDAQ

    15,611.76
    -100.99 (-0.64%)
     

  • VOLATILITY

    15.37
    -0.60 (-3.76%)
     

  • FTSE

    8,078.86
    +38.48 (+0.48%)
     

  • NIKKEI 225

    37,628.48
    -831.60 (-2.16%)
     

  • CAD/EUR

    0.6823
    +0.0004 (+0.06%)
     
MARKETS LIVE BLOG:

STOCKS SLIDE AFTER META'S REALITY CHECK, DOWNBEAT GDP

Caterpillar sinks 7% after earnings, management sees weakness in Europe, Asia-Pacific

Can Capital Redeployment Drive Mack-Cali's (CLI) Growth?

Zacks Equity Research

Mack-Cali Realty Corporation CLI has been redeploying non-core asset sale proceeds into office and multi-family properties acquisitions as well as debt reduction. Such capital recycling efforts are encouraging. However, the dilutive impact on earnings from such huge asset sales cannot be bypassed in the near term.

Recently, the company’s board of directors decided to dispose its entire 6.6 million square-foot suburban office portfolio. It plans to complete the sale of this entire portfolio in 2020, after which, the company’s entire holdings will consist of its waterfront Class-A office portfolio, spanning 5 million square feet of space and the multi-family residential real estate operations through its subsidiary Roseland Residential Trust. Moreover, Mack-Cali intends to use asset sales proceeds to repay outstanding corporate-level, unsecured debt. This will strengthen the company’s balance sheet. (Read more: Mack-Cali to Dispose Entire Sub-urban Office Portfolio)

It has also completed a three-year strategic initiative started in September 2015, aimed at transforming the company into a more concentrated owner of New Jersey Hudson River waterfront and transit-oriented office properties as well as a regional owner of luxury multi-family residential properties.

Further, Mack-Cali has been active on the investment front. In the first nine months of 2019, it completed acquisition of three rental properties for $736.9 million and intends to upgrade its current amenities and improve its properties with major capital-investment programs. These strategic efforts will drive quality improvement of cash flow and enable the company to achieve better margins in both office and multi-family apartment portfolios.

ADVERTISEMENT

Additionally, the company has been winding up its business in non-core markets and shedding non-core assets. It sold part of its flex portfolio in 2018 for $70.3 million, and in first-quarter 2019 for $487.5 million. Also, for full-year 2019, Mack-Cali estimated $190-$240 million of dispositions excluding its flex properties. While the measures are apt for the long run, the dilutive impact on earnings from such huge asset sales cannot be bypassed in the near term.

Further, in a bid to expand its multi-family platform, the company has been actively investing in its construction pipeline that comprises 1,944 apartments. While this is encouraging from the long-term perspective, such efforts involve significant upfront operating expenses and hence, limit the company’s growth momentum in the near term.

Shares of this Zacks Rank #3 (Hold) company have gained 5.3% in the past three months against the industry’s decline of 1.6%.


Stocks to Consider

Prologis, Inc. PLD currently sports a Zacks Rank of 1 (Strong Buy). The company’s FFO per share estimates for 2019 have been revised 0.3% upward to $3.31 in two months’ time. Shares of the company have rallied 9.2% over the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.

Duke Realty's DRE Zacks Consensus Estimate for the current-year FFO per share has moved north to $1.44 in the past two months. This Zacks Rank #2 (Buy) company’s shares have gained 7.6% over the past six months.

Cousins Properties Incorporated’s CUZ Zacks Consensus Estimate for the ongoing-year FFO per share has moved 2.1% north to $2.96 over the past two months. Shares of this Zacks Rank #2 company have gained 8% in six months’ time.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Mack-Cali Realty Corporation (CLI) : Free Stock Analysis Report
 
Cousins Properties Incorporated (CUZ) : Free Stock Analysis Report
 
Duke Realty Corporation (DRE) : Free Stock Analysis Report
 
Prologis, Inc. (PLD) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research