Yahoo Finance Realty Income Withdraws 2020 Guidance on Coronavirus Scare
The coronavirus outbreak has been wreaking havoc on U.S. economy for the past couple of months, the retail REIT sector being no exception. In regard to that, Realty Income Corporation O recently informed its stakeholders about the actions being taken to counter this volatile situation.
Like other retail REIT counterparts, including The Macerich Company MAC, Regency Centers REG and SITE Centers Corp SITC, Realty Income has withdrawn its 2020 guidance issued on Feb 19, 2020. The company had projected 2020 adjusted funds from operations (FFO) per share per share to be in the range of $3.50 to $3.56. It is also expected to invest $2.25-$2.75 billion this year.
Apart from guidance withdrawal, Realty Income also apprised of its liquidity position and the measures undertaken to enhance the same to sail through these uncertain times. Under its revolving credit facility, the company recently borrowed an additional $1.2 billion.
The total capacity of the revolving credit facility is $3 billion. Taking into account the recent borrowings, as of Apr 9, 2020, $1.2 billion remains of the facility, along with the accordion feature of the facility of about $1 billion. The cost of borrowing for the company stands at LIBOR plus 77.5 basis points. The company has a current credit rating of A- / A3.
The company had a cash balance of $1.25 billion as of Apr 9, 2020, taking into account the recent borrowings.
Notably, the escalating number of coronavirus cases has forced several retailers to close their stores, in order to contain the spread of the virus. Some retailers have also reduced store hours, while many others are keeping their e-retail operations running as consumers are now increasingly opting for online purchases. As a result, retail REITs, which have already been battling store closure and bankruptcy issues, have been affected because consumers are avoiding gathering in large public spaces. Further, the overall impact of the pandemic on the larger economy remains unknown.
However, with prudent balance-sheet management efforts and adequate liquidity position, Realty Income seems well poised to sail through these uncertain times.
It has a proven track record of paying dividends to its shareholders. In January, the company announced a hike in its common stock monthly cash dividend, denoting the 105th dividend increase since its NYSE listing in 1994. The company enjoys a trademark on the phrase “The Monthly Dividend Company”.
Shares of Realty Income, currently carrying a Zacks Rank #3 (Hold), have depreciated 20.6% so far this year, while its industry has declined 29.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Macerich Company (The) (MAC) : Free Stock Analysis Report
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