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Why It is Wise to Hold Cousins Properties (CUZ) Stock Now

Cousins Properties (CUZ) is well-poised to gain from the improving Sun Belt office market fundamentals though stiff competition and huge capital outlays are concerns.

This story originally appeared on Zacks

Cousins Properties CUZ is expected to capitalize on solid long-term growth fundamentals of the Sun Belt markets, including inbound business migration, steady office absorption and positive rent growth. Nonetheless, a competitive landscape due to high supply in the office real-estate market and huge capital outlays might act as deterrents.

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Cousins Properties has an unmatched portfolio of class A office assets concentrated in the high-growth Sun Belt markets. CUZ is witnessing a recovery in demand for its highly-amenitized and well-placed office properties as highlighted by the rebound in new leasing volume.

It makes concerted efforts to upgrade portfolio quality with trophy asset acquisitions and opportunistic developments in high-growth Sun Belt submarkets. The transactions boost Cousins Properties’ presence in the Sun Belt region.

Additionally, CUZ enjoys a robust balance-sheet position. It exited the third quarter with cash and cash equivalents of $5.5 million and $966 million of availability under its $1-billion credit facility. A low-leveraged balance sheet offers Cousins Properties ample flexibility to pursue compelling growth opportunities.

However, Cousins Properties faces intense competition from developers, owners and operators of office properties and other commercial real estate. This might adversely impact its pricing power.

While Cousins Properties’ development pipeline is accretive for value creation, it requires huge capital outlays. Also, an extensive development pipeline escalates its risks by exposing it to construction cost overruns, entitlement delays and lease-up risks.

Shares of the currently Zacks Rank #3 (Hold) Cousins Properties have appreciated 7.4% in the past six months, underperforming the industry’s growth of 8.3%. Further, the trend in estimate revisions for 2021 funds from operations (FFO) per share does not indicate a favorable outlook for CUZ as the same has remained unrevised in the past month.

Zacks Investment ResearchImage Source: Zacks Investment Research

Stocks to Consider

Some better-ranked stocks from the REIT sector are OUTFRONT Media OUT, Cedar Realty Trust CDR and Condor Hospitality Trust CDOR.

The Zacks Consensus Estimate for OUTFRONT Media’s 2021 FFO per share has been raised 13.8% over the past two months. OUT’s 2021 FFO per share is expected to increase 45.71% from the year-ago reported figure. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

OUTFRONT Media flaunts a Zacks Rank #1 (Strong Buy) at present. Shares of OUT have gained 9.7% in the past six months.

The Zacks Consensus Estimate for Cedar Realty’s current-year FFO per share has been raised 2.6% to $2.36 in the past two months. Over the last four quarters, CDR’s FFO per share surpassed the consensus mark twice and missed the same on the other two occasions, the average surprise being 6.4%.

Currently, CDR sports a Zacks Rank of 1. Shares of Cedar Realty have appreciated 39.5% in the past six months.

The Zacks Consensus Estimate for Condor Hospitality Trust’s 2021 FFO per share has been raised 25.8% over the past two months. CDOR’s 2021 FFO per share is expected to increase significantly from the year-ago reported figure.

Condor Hospitality sports a Zacks Rank of 1 at present. Shares of CDOR have rallied 30.8% in the past six months.

Note: Anything related to earnings presented in this write-up represent FFO — a widely used metric to gauge the performance of REITs.

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Cousins Properties Incorporated (CUZ): Free Stock Analysis Report


Cedar Realty Trust, Inc. (CDR): Free Stock Analysis Report


OUTFRONT Media Inc. (OUT): Free Stock Analysis Report


Condor Hospitality Trust, Inc. (CDOR): Free Stock Analysis Report


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