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Kimco Realty Corp KIM

Morningstar Rating
$19.61 +0.25 (1.29%)
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Company Report

Following Two Years of Rising Interest Rates, We Believe REITs Are Trading at Significant Discounts

We believe that there are several attractive opportunities across the US REIT sector for investors to consider. Following the recovery of many REIT sector fundamentals from the pandemic by mid-2021, we viewed the REIT sector as fairly valued through early 2022. However, the past two years have seen the rapid rise in interest rates and a slowing economy, which has led to major valuation declines across the sector. Our analysis of the REIT sector over the past 25 years suggests that the relative stock performance of REITs is negatively correlated with interest rate movements. The second and third quarters of 2023 saw large interest rate increases with the 10-year Treasury approaching 5%, which led to the sector underperforming. This occurred even as many REITs reported same-store net operating income, or NOI, growth at historical highs in 2022 due to high inflation. Higher interest rates, lower liquidity, tighter capital market conditions, and decelerating same-store NOI growth all led to a significant correction in the stock price for many REITs.

Price vs Fair Value

KIM is trading at a 26% discount.
Price
$18.84
Fair Value
$35.30
Uncertainty
Medium
1-Star Price
$48.91
5-Star Price
$45.87
Economic Moat
Qzjq
Capital Allocation
Xzkplqz

Bulls Say, Bears Say

Bulls

Many of Kimco’s in-place leases are significantly below current market rents, providing a potential and notable source of organic growth well into the future.

Bears

Many of Kimco’s in-place leases are subject to renewal options that allow tenants to extend the leases without full renegotiation of rent, preventing the company from realizing often higher current market rents.

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News

Trading Information

Previous Close Price
$19.36
Day Range
$19.4219.66
52-Week Range
$16.3422.84
Bid/Ask
$19.24 / $19.69
Market Cap
$13.22 Bil
Volume/Avg
7.6 Mil / 5.9 Mil

Key Statistics

Price/Earnings (Normalized)
31.84
Price/Sales
6.71
Dividend Yield (Trailing)
4.86%
Dividend Yield (Forward)
4.96%
Total Yield
4.86%

Company Profile

One of the oldest real estate investment trusts in the United States, Kimco Realty owns interests in 523 shopping centers throughout major markets in the US, representing roughly 77 million square feet.
Sector
Real Estate
Industry
REIT - Retail
Stock Style Box
Mid Growth
Total Number of Employees
660

Competitors

Valuation

Metric
KIM
O
FRT
Price/Earnings (Normalized)
31.8439.0738.52
Price/Book Value
1.261.233.00
Price/Sales
6.719.147.29
Price/Cash Flow
11.2113.3814.93
Price/Earnings
KIM
O
FRT

Financial Strength

Metric
KIM
O
FRT
Quick Ratio
6.401.491.55
Current Ratio
6.421.531.55
Interest Coverage
3.572.102.45
Quick Ratio
KIM
O
FRT

Profitability

Metric
KIM
O
FRT
Return on Assets (Normalized)
3.92%2.07%3.11%
Return on Equity (Normalized)
7.37%3.61%9.35%
Return on Invested Capital (Normalized)
4.41%3.47%4.99%
Return on Assets
KIM
O
FRT
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REIT - Retail Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
SPG
Simon Property Group IncPydrsbdbsZcltf$50.3 Bil
O
Realty Income CorpVjvjxkpxZgmj$46.3 Bil
STGPF
Scentre GroupCwthw$11.4 Bil
UNIRF
Unibail-Rodamco-Westfield ADRNcw$11.3 Bil
UNBLF
Unibail-Rodamco-Westfield Act. SIIC ET STES FONC.EUROP.Xny$11.3 Bil
LKREF
Link Real Estate Investment TrustNtqh$11.2 Bil
REG
Regency Centers CorpZxkzsqkDrtcz$11.1 Bil
FRT
Federal Realty Investment TrustKkgddnlbBmpdj$8.4 Bil
MAC
Macerich CoYvbzzyjtMjl$3.7 Bil

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