CUZ Cousins Properties Inc

We reiterate our Neutral recommendation on Cousins Properties Inc (CUZ) as we expect the stock to perform in line with the broader market. The company reported first quarter 2011 FFO (fund from operations) of $8.1 million or 8 cents per share compared with a loss of $14 million or 14 cents per share in the year-earlier quarter. Fund from operations, a widely used metric to gauge the performance of  real estate investment trust (REITs), is obtained after adding depreciation and amortization and other non-cash expenses to net income.

Atlanta, Georgia-based Cousins Properties Inc. is engaged in the acquisition, financing, development, management, and leasing of office, retail and industrial properties throughout the U.S., including Atlanta, Charlotte, Austin, San Francisco, Los Angeles and Washington DC. Cousins Properties also provides leasing and asset management services to third-party investors.

Cousins Properties has a diversified portfolio with a broad array of product types – office, retail, urban residential and single-family communities that mitigate operating risks associated with the economic down cycles. Consequently, the company has a relatively steady source of revenue generation. Cousins Properties has a strong balance sheet with adequate liquidity and minimal debt maturities.

The company generates a significant amount of revenue from its office portfolio. Office demand is highly correlated to job growth. If job losses continue, operations in the company’s office portfolio will suffer, thereby affecting the top-line growth of the company.

Cousins Properties currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Duke Realty Corp. (DRE) currently retains a Zacks #3 Rank.

 
COUSIN PROP INC (CUZ): Free Stock Analysis Report
 
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