Top Yield Regional Mall REITs (19 May 15)

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Below we have highlighted the group of real estate investment trusts (REITs) classified as regional malls by the FTSE NAREIT All REITs Index. The list has been ranked by dividend yield, from highest to lowest.

  • Reference date: 19 May 2015
  • Price to FFO: Using Company’s FFO
  • Projected FFO per share percent change: 2015 (guidance) vs. 2014 Company’s FFO per share percent change (Full year figures)

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# Div Yield Company Ticker Year to date share price change Div. Yield Group’s Median Div. Yield   Price- to-FFO Group’s Median Price-to-FFO   2015 vs. 2014 FFO percent change
1 CBL & Associates Properties, Inc. CBL (6.5) 5.8 3.2 8.7 17.2 (0.2)
2 Rouse Properties, Inc. RSE (4.6) 4.1 3.2 11.0 17.2 6.7
3 Pennsylvania Real Estate Investment Trust PEI (3.4) 3.7 3.2 14.2 17.2 (3.3)
4 Simon Property Group, Inc. SPG 1.0 3.3 3.2 20.2 17.2 8.4
5 Macerich Company MAC (0.4) 3.1 3.2 24.2 17.2 7.8
6 WP GLIMCHER, Inc WPG (15.5) 3.0 3.2 7.7 17.2 (1.1)
7 Taubman Centers, Inc. TCO (1.7) 3.0 3.2 23.2 17.2 0.9*
8 General Growth Properties, Inc. GGP 1.7 2.4 3.2 22.4 17.2 8.3
 *Excludes the company’s 9.5 months of ownership of seven centers sold to Starwood ($0.46 to adjusted FFO per share) 

Notes from the author: This is not a recommendation to buy or sell stocks. The highest-yield stocks are not necessarily the best choice for your portfolio. The purpose of this ranking is to shorten your stock analysis by enabling comparison of stock and sector performance. This is a snapshot of information available on 19 May 2015. Please perform your own due diligence before acting. The equity REITs are constituent companies of the FTSE NAREIT All REITs Index as of 30 April 2015.

Check out latest article about CBL & Associates

Written by Heli Brecailo

Disclaimer: This newsletter is not engaged in rendering tax, accounting, or other professional advice through this publication. No statement in this issue is to be construed as a recommendation to buy or sell any security or other investment. Please do your own due diligence before making any investment decision. Some information presented in this publication has been obtained from third-party sources considered to be reliable. Sources are not required to make representations as to the accuracy of the information, however, and consequently the publisher cannot guarantee accuracy.

Disclosure: The author has no positions in any shares mentioned, and no plans to initiate any positions within the next 72 hours.​

U.S. – Top Yield Equity REITs – Find Price-To-FFO

Dividend yield is one of the main reasons why investors buy REIT stocks. Do not fall into the trap that higher yield means better stock. Funds from operations (FFO) is an important metric that measures cash generation. For REITs, FFO is a better indicator of performance than earnings.

Equity REITs Ranked by Dividend Yield

Total 169 Equity REITs

Share Price, Price-to-FFO, Dividend Yield – As of 10 April 2015

Sector’s Price-to-FFO – Median Price-to-FFO by sector

FFO in accordance with NAREIT definition from last available quarter (Mostly Q4-2014).

Some companies have not published FFO (That explains blank spaces).

# COMPANY TICKER PROPERTY SECTOR SHARE PRICE PRICE-TO-FFO SECTOR’S PRICE-TO-FFO DIV. YIELD
1 NorthStar Realty Finance Corp. NRF Diversified 18.31 8.7
2 Bluerock Residential Growth REIT, Inc. Class A BRG Residential 13.4 8.7
3 Gladstone Commercial Corporation GOOD Industrial/Office 18.5 7.1 16.1 8.1
4 Select Income REIT SIR Diversified 24.44 9.7 16.9 7.9
5 Government Properties Income Trust GOV Industrial/Office 22.49 10.0 16.1 7.6
6 Independence Realty Trust, Inc. IRT Residential 9.55 17.1 19.1 7.5
7 CorEnergy Infrastructure Trust, Inc. CORR Infrastructure 6.92 21.6 21.6 7.5
8 Senior Housing Properties Trust SNH Health Care 21.45 11.2 17.6 7.3
9 Whitestone REIT WSR Diversified 15.76 17.9 16.9 7.2
10 Investors Real Estate Trust IRET Diversified 7.33 10.8 16.9 7.1
11 City Office REIT, Inc. CIO Industrial/Office 13.27 18.4 16.1 7.1
12 Lexington Realty Trust LXP Diversified 9.68 9.7 16.9 7.0
13 UMH Properties, Inc. UMH Residential 10.44 16.3 19.1 6.9
14 One Liberty Properties, Inc. OLP Diversified 23.55 17.8 16.9 6.6
15 Chambers Street Properties CSG Industrial/Office 7.79 13.9 16.1 6.5
16 Armada Hoffler Properties, Inc. AHH Diversified 10.52 13.2 16.9 6.5
17 Preferred Apartment Communities, Inc. APTS Residential 11.14 11.1 19.1 6.3
18 EPR Properties EPR Diversified 58.5 13.3 16.9 6.2
19 Hospitality Properties Trust HPT Lodging/Resorts 31.97 9.2 16.3 6.1
20 Franklin Street Properties Corp. FSP Industrial/Office 12.55 11.6 16.1 6.1
21 STAG Industrial, Inc. STAG Industrial/Office 22.33 16.4 16.1 6.0
22 Gaming and Leisure Properties, Inc. WI GLPI Diversified 36.7 16.1 16.9 5.9
23 Medical Properties Trust, Inc. MPW Health Care 14.93 24.9 17.6 5.9
24 GEO Group Inc GEO Diversified 43.07 15.4 16.9 5.8
25 Spirit Realty Capital, Inc. SRC Retail 11.84 14.8 18.6 5.7
26 W.P. Carey Inc. WPC Diversified 66.92 16.9 16.9 5.7
27 Omega Healthcare Investors, Inc. OHI Health Care 38.86 14.3 17.6 5.6
28 CBL & Associates Properties, Inc. CBL Retail 19.1 5.8 18.6 5.5
29 Monmouth Real Estate Investment Corporation Class A MNR Industrial/Office 10.83 19.3 16.1 5.5
30 New Senior Investment Group Inc SNR Health Care 16.62 18.1 17.6 5.5
31 Agree Realty Corporation ADC Retail 32.65 14.3 18.6 5.5
32 Inland Real Estate Corporation IRC Retail 10.57 10.6 18.6 5.4
33 Corrections Corporation of America CXW Diversified 40.08 15.0 16.9 5.4
34 Liberty Property Trust LPT Industrial/Office 35.41 13.2 16.1 5.4
35 HCP, Inc. HCP Health Care 42.64 15.2 17.6 5.3
36 Trade Street Residential, Inc. TSRE Residential 7.18 35.9 19.1 5.3
37 First Potomac Realty Trust FPO Industrial/Office 11.34 10.5 16.1 5.3
38 Digital Realty Trust, Inc. DLR Diversified 65.22 11.6 16.9 5.2
39 DuPont Fabros Technology, Inc. DFT Diversified 32.43 14.0 16.9 5.2
40 Physicians Realty Trust DOC Health Care 17.53 23.1 17.6 5.1
41 Iron Mountain, Inc. IRM Diversified 37.17 33.2 16.9 5.1
42 Ashford Hospitality Trust, Inc. AHT Lodging/Resorts 9.59 15.0 16.3 5.0
43 Getty Realty Corp. GTY Retail 17.72 11.7 18.6 5.0
44 Sabra Health Care REIT, Inc. SBRA Health Care 31.78 14.7 17.6 4.9
45 BioMed Realty Trust, Inc. BMR Industrial/Office 21.24 15.2 16.1 4.9
46 National Health Investors, Inc. NHI Health Care 69.8 16.3 17.6 4.9
47 CareTrust REIT Inc CTRE Health Care 13.47 14.0 17.6 4.8
48 Universal Health Realty Income Trust UHT Health Care 53.81 18.4 17.6 4.7
49 Urstadt Biddle Properties Inc. Class A UBA Retail 21.76 22.7 18.6 4.7
50 Piedmont Office Realty Trust, Inc. Class A PDM Industrial/Office 18.25 11.4 16.1 4.6
51 Washington Real Estate Investment Trust WRE Diversified 26.11 16.3 16.9 4.6
52 Realty Income Corporation O Retail 49.51 19.3 18.6 4.6
53 OUTFRONT Media Inc. OUT Diversified 29.63 13.0 16.9 4.6
54 Excel Trust, Inc EXL Retail 15.82 26.4 18.6 4.6
55 Lamar Advertising Company Class A LAMR Diversified 60 10.5 16.9 4.5
56 LTC Properties, Inc. LTC Health Care 45.21 17.7 17.6 4.5
57 Columbia Property Trust, Inc. CXP Industrial/Office 26.62 13.6 16.1 4.5
58 Home Properties, Inc. HME Residential 67.68 14.6 19.1 4.5
59 New York REIT, Inc. NYRT Industrial/Office 10.27 11.2 16.1 4.5
60 Healthcare Realty Trust Incorporated HR Health Care 26.82 17.6 17.6 4.5
61 CatchMark Timber Trust, Inc. Class A CTT Timber 11.36 56.8 27.3 4.4
62 Chesapeake Lodging Trust CHSP Lodging/Resorts 31.88 21.0 16.3 4.4
63 Parkway Properties, Inc. PKY Industrial/Office 17.1 13.8 16.1 4.4
64 Ramco-Gershenson Properties Trust RPT Retail 18.34 91.7 18.6 4.4
65 Health Care REIT, Inc. HCN Health Care 76.19 22.1 17.6 4.3
66 Hersha Hospitality Trust Class A HT Lodging/Resorts 6.48 13.5 16.3 4.3
67 Ryman Hospitality Properties, Inc. RHP Lodging/Resorts 60.52 8.6 16.3 4.3
68 Healthcare Trust of America, Inc. Class A HTA Health Care 27.08 20.5 17.6 4.3
69 STORE Capital Corporation STOR Retail 23.36 18.3 18.6 4.3
70 RLJ Lodging Trust RLJ Lodging/Resorts 30.93 14.6 16.3 4.3
71 Retail Properties of America, Inc. Class A RPAI Retail 15.85 15.2 18.6 4.2
72 Education Realty Trust, Inc. EDR Residential 34.48 16.6 19.1 4.2
73 National Retail Properties, Inc. NNN Retail 40.68 18.2 18.6 4.1
74 Plum Creek Timber Company, Inc. PCL Timber 42.63 27.3 27.3 4.1
75 Sun Communities, Inc. SUI Residential 63.28 31.6 19.1 4.1
76 Chatham Lodging Trust CLDT Lodging/Resorts 29.4 32.0 16.3 4.1
77 Mid-America Apartment Communities, Inc. MAA Residential 75.67 14.0 19.1 4.1
78 Xenia Hotels & Resorts, Inc. XHR Lodging/Resorts 22.84 4.0
79 Host Hotels & Resorts, Inc. HST Lodging/Resorts 19.93 12.5 16.3 4.0
80 Winthrop Realty Trust FUR Diversified 16.24 4.0
81 CyrusOne, Inc. CONE Diversified 31.62 29.3 16.9 4.0
82 LaSalle Hotel Properties LHO Lodging/Resorts 37.83 16.3 16.3 4.0
83 Weingarten Realty Investors WRI Retail 34.86 17.1 18.6 4.0
84 Brandywine Realty Trust BDN Industrial/Office 15.21 12.7 16.1 3.9
85 Rouse Properties, Inc. RSE Retail 18.36 12.8 18.6 3.9
86 Kite Realty Group Trust KRG Retail 27.87 13.9 18.6 3.9
87 Crown Castle International Corp CCI Infrastructure 84.69 18.1 21.6 3.9
88 Retail Opportunity Investments Corp. ROIC Retail 17.71 21.1 18.6 3.8
89 Potlatch Corporation PCH Timber 39.14 20.0 27.3 3.8
90 Corporate Office Properties Trust OFC Industrial/Office 28.92 21.3 16.1 3.8
91 Pennsylvania Real Estate Investment Trust PEI Retail 22.12 9.4 18.6 3.8
92 Rayonier Inc. RYN Timber 26.35 94.1 27.3 3.8
93 EastGroup Properties, Inc. EGP Industrial/Office 60.13 16.5 16.1 3.8
94 DDR Corp. DDR Retail 18.3 20.8 18.6 3.8
95 Highwoods Properties, Inc. HIW Industrial/Office 45.32 15.3 16.1 3.8
96 Kimco Realty Corporation KIM Retail 25.91 17.0 18.6 3.7
97 Sotherly Hotels Inc. SOHO Lodging/Resorts 7.63 10.6 16.3 3.7
98 Camden Property Trust CPT Residential 76.63 19.4 19.1 3.7
99 American Campus Communities, Inc. ACC Residential 41.83 14.3 19.1 3.6
100 Weyerhaeuser Company WY Timber 32.25 26.0 27.3 3.6
101 DiamondRock Hospitality Company DRH Lodging/Resorts 13.95 18.4 16.3 3.6
102 Brixmor Property Group, Inc. BRX Retail 25.22 14.7 18.6 3.6
103 QTS Realty Trust, Inc. Class A QTS Diversified 36.5 16.9 16.9 3.5
104 Summit Hotel Properties, Inc., INN Lodging/Resorts 13.52 17.8 16.3 3.5
105 Gladstone Land Corp. LAND Diversified 12.16 32.3 16.9 3.5
106 Associated Estates Realty Corporation AEC Residential 24.37 18.5 19.1 3.4
107 Prologis, Inc. PLD Industrial/Office 42.49 20.8 16.1 3.4
108 Equity One, Inc. EQY Retail 26.09 26.1 18.6 3.4
109 UDR, Inc. UDR Residential 32.99 20.6 19.1 3.4
110 Urban Edge Properties UE Retail 23.99 3.3
111 CoreSite Realty Corporation COR Diversified 50.52 20.7 16.9 3.3
112 DCT Industrial Trust Inc. DCT Industrial/Office 33.76 18.3 16.1 3.3
113 Duke Realty Corporation DRE Industrial/Office 20.54 25.7 16.1 3.3
114 Tanger Factory Outlet Centers, Inc. SKT Retail 34.73 21.7 18.6 3.3
115 Sovran Self Storage, Inc. SSS Self Storage 91.95 21.3 22.4 3.3
116 Saul Centers, Inc. BFS Retail 53.79 21.7 18.6 3.2
117 Mack-Cali Realty Corporation CLI Industrial/Office 18.77 13.8 16.1 3.2
118 Macerich Company MAC Retail 81.35 20.5 18.6 3.2
119 Monogram Residential Trust Inc MORE Residential 9.4 39.2 19.1 3.2
120 Cousins Properties Incorporated CUZ Industrial/Office 10.1 10.5 16.1 3.2
121 Ventas, Inc. VTR Health Care 74.05 16.0 17.6 3.1
122 Alexandria Real Estate Equities, Inc. ARE Industrial/Office 95.01 27.6 16.1 3.1
123 Alexander’s, Inc. ALX Diversified 451.98 22.6 16.9 3.1
124 Rexford Industrial Realty, Inc. REXR Industrial/Office 15.91 20.9 16.1 3.0
125 Taubman Centers, Inc. TCO Retail 74.93 34.7 18.6 3.0
126 AvalonBay Communities, Inc. AVB Residential 168.31 23.9 19.1 3.0
127 Apartment Investment and Management Company Class A AIV Residential 37.83 17.5 19.1 3.0
128 Simon Property Group, Inc. SPG Retail 191.27 19.4 18.6 2.9
129 Regency Centers Corporation REG Retail 66.35 21.3 18.6 2.9
130 Equity Residential EQR Residential 75.62 21.7 19.1 2.9
131 Public Storage PSA Self Storage 193.69 22.3 22.4 2.9
132 Acadia Realty Trust AKR Retail 33.47 27.9 18.6 2.9
133 Post Properties, Inc. PPS Residential 55.87 19.1 19.1 2.9
134 Gramercy Property Trust Inc. GPT Diversified 28.14 35.2 16.9 2.8
135 Equity LifeStyle Properties, Inc. ELS Residential 52.89 20.0 19.1 2.8
136 Equinix, Inc. EQIX Diversified 239.65 2.8
137 Douglas Emmett, Inc DEI Industrial/Office 29.85 19.1 16.1 2.8
138 Terreno Realty Corporation TRNO Industrial/Office 22.76 28.5 16.1 2.8
139 Extra Space Storage Inc. EXR Self Storage 67.08 27.0 22.4 2.8
140 Pebblebrook Hotel Trust PEB Lodging/Resorts 44.78 26.0 16.3 2.8
141 WP GLIMCHER, Inc WPG Retail 16.01 8.7 18.6 2.7
142 CubeSmart CUBE Self Storage 23.41 22.5 22.4 2.7
143 Cedar Realty Trust, Inc. CDR Retail 7.54 15.7 18.6 2.7
144 Essex Property Trust, Inc. ESS Residential 222.19 24.3 19.1 2.6
145 First Industrial Realty Trust, Inc. FR Industrial/Office 20.25 15.8 16.1 2.5
146 PS Business Parks, Inc. PSB Industrial/Office 80.81 17.7 16.1 2.5
147 Federal Realty Investment Trust FRT Retail 142.42 31.5 18.6 2.4
148 General Growth Properties, Inc. GGP Retail 28.81 19.0 18.6 2.4
149 Vornado Realty Trust VNO Diversified 107.42 22.0 16.9 2.3
150 Silver Bay Realty Trust Corp. SBY Diversified 15.91 33.1 16.9 2.3
151 American Assets Trust, Inc. AAT Diversified 42.1 25.1 16.9 2.2
152 Starwood Waypoint Residential Trust SWAY Diversified 25.98 24.1 16.9 2.2
153 Paramount Group, Inc. PGRE Industrial/Office 18.67 12.0 16.1 2.0
154 Boston Properties, Inc. BXP Industrial/Office 137.58 27.3 16.1 1.9
155 SL Green Realty Corp. SLG Industrial/Office 127.85 22.4 16.1 1.9
156 Kilroy Realty Corporation KRC Industrial/Office 75.06 24.1 16.1 1.9
157 Empire State Realty Trust, Inc. Class A ESRT Industrial/Office 18.59 21.1 16.1 1.8
158 American Tower Corporation AMT Infrastructure 95.07 23.8 21.6 1.8
159 Hudson Pacific Properties, Inc. HPP Industrial/Office 31.97 33.3 16.1 1.6
160 FelCor Lodging Trust Incorporated FCH Lodging/Resorts 11.33 25.8 16.3 1.4
161 Ashford Hospitality Prime, Inc. AHP Lodging/Resorts 16.2 19.3 16.3 1.2
162 Sunstone Hotel Investors, Inc. SHO Lodging/Resorts 16.31 15.7 16.3 1.2
163 American Homes 4 Rent Class A AMH Diversified 17.23 39.2 16.9 1.2
164 American Residential Properties, Inc. ARPI Diversified 18.5 115.6 16.9
165 Easterly Government Properties, Inc. DEA Industrial/Office 16.22
166 Equity Commonwealth EQC Industrial/Office 26.2 13.9 16.1
167 Strategic Hotels & Resorts, Inc. BEE Lodging/Resorts 12.2 21.8 16.3
168 Campus Crest Communities, Inc. CCG Residential 6.85
169 American Realty Capital Properties, Inc. Class A ARCP Retail 9.73

Notes from the author

This is not a recommendation to buy or sell stocks. The highest-yield stocks are not necessarily the best choice for your portfolio. The purpose of this ranking is to shorten your stock analysis by enabling comparison of stock and sector performance. This is a snapshot of information available on 10 April 2015. Please perform your own due diligence before acting. The equity REITs are constituent companies of the FTSE NAREIT All REITs Index as of 31 March 2015. Companies whose equity market capitalization is lower than $100 million have been disregarded.Button



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Written by Heli Brecailo Disclaimer This newsletter is not engaged in rendering tax, accounting, or other professional advice through this publication. No statement in this issue is to be construed as a recommendation to buy or sell any security or other investment. Please do your own due diligence before making any investment decision. Some information presented in this publication has been obtained from third-party sources considered to be reliable. Sources are not required to make representations as to the accuracy of the information, however, and consequently the publisher cannot guarantee accuracy. Disclosure The author has no positions in any shares mentioned, and no plans to initiate any positions within the next 72 hours.​

U.S. REIT – CyrusOne’s current share price is just about right

Release: 01 March 2015


Introduction

CyrusOne (NASDAQ:CONE) is one of the fastest growing companies in the data center REIT sector. However, that doesn’t make it an easy buy. Although the company is well positioned in a market where the fundamentals have been strong, CyrusOne is already trading at a reasonable value. Taking into consideration the company’s 2015 guidance, as well as its history and peers, the current share price is already the correct valuation.

chart05

Company Description

Entering its third year as a public company, CyrusOne is a small cap company (market capitalization of US$1.1 billion) that develops, owns, and operates data center properties. It has 25 operating data centers in eleven distinct markets (nine cities in the U.S., as well as London and Singapore) that include power, cooling, and telecommunications systems, which enable interconnectivity between data centers and a range of telecommunication carriers. These data center facilities are critical to the continued operation of its customers’ information technology infrastructure.

CyrusOne generates recurring revenues by leasing colocation space, and nonrecurring revenues from the initial installation and set-up of customer equipment. It provides customers with data center services pursuant to leases, with a customary initial term of three to five years. At the end of the lease term, customers may sign a new lease or automatically renew pursuant to the terms of their lease. As of December 31, 2014, the weighted average initial lease term was 69 months, and the weighted average remaining lease term for the top 20 customers was 34 months.

Recognizing the growth potential of outsourcing in a market where only a portion of large U.S. enterprises use third-party data center colocation services, CyrusOne focuses on high-revenue clients – out of 669 customers, 144 are in the Fortune 1000. This strategy has led to revenue concentration within a small pool of customers: 40 customers account for 71 percent of leased space and 58 percent of annualized revenues.

chart01

Source: CyrusOne Fourth Quarter 2014 Earnings Report

In 2014, CyrusOne’s growth was fueled by both new and existing clients, leading to an increase in leased colocation area of 20 percent, and to a corresponding increase in revenues by 20 percent, with the help of escalators, ancillary and services products, and interconnection.

chart02

Source: CyrusOne Fourth Quarter 2014 Earnings Presentation

As of December 31, 2014, CyrusOne had 1.2 million colocation square feet. Colocation square feet (CSF) represents net rentable square feet (NRSF) leased or available for lease as colocation space, where customers locate their servers and other IT equipment. NRSF represents the total square footage of a building leased or available for lease based on engineers’ drawings and estimates, not including space held for development or used directly by CyrusOne. NRSF that is not CSF typically comprises office space and similar uses.

Market Landscape

During a webinar by 451 Research on February 18, enterprise data center expert Dan Harrington underlined that the number of data centers in North America has been declining due to the consolidation of enterprise data centers. In fact, he pointed out that the priority for data centers among enterprise in the short term has been asset utilization, consolidation, and retrofit (which allows more power into the rack and better cooling equipment).

However, although the overall market is in decline there are nonetheless pockets of growth. Cloud services, service providers, and multi-tenant data centers have been driving growth as companies look to outsource their IT to third-party providers.

In addition to being a third-party provider, CyrusOne is well positioned in the data center market for several reasons:

  • It is strategically located in popular locations in the U.S. that have grown significantly (Texas and Virginia) and in Europe (the UK).
  • A good portion of its top clients are heavy users – telecommunication services, information technology, and financial companies.

CyrusOne doesn’t expect material negative impact from energy companies. For its top 10 Oil & Gas customers, annualized rents represent only 0.006 percent of their operating expenses. On top of that, the proportion of business from energy customers is down to 28 from 37 percent two years ago (as of December 2014).

Source: Dan Harrington, Research Manager, Enterprise Datacenters, webinar The State of the Datacenter Market: Disruption and Opportunity for 2015 and Beyond

Revenue & FFO Outlook

Despite projecting 25 percent growth in colocation square footage in 2015, CyrusOne doesn’t estimate that revenue and funds from operations (FFO) will grow to the same degree. According to the company’s 2015 guidance, revenue should increase 12-16 percent and normalized FFO 10-16 percent. That’s certainly a slowdown in growth in comparison to the previous year.

chart04

This disconnect between additional colocation area and revenue/FFO projected growth most likely results from one (or a combination) of three potential risks:

  1. The company cannot achieve its goal of adding 275-325 thousand CSF online in 2015, ending 2015 with approximately 1.5 million CSF. This is its most aggressive goal in recent quarters.
  2. The company cannot utilize the new area at the portfolio rate (88 percent), and consequently overall occupancy will fall.
  3. The company must lower its prices in order to quickly monetize the new areas. This possibility seems to be remote, however, because the average revenue per square foot has been flat over the past few years.

The chart below shows CyrusOne’s projected revenues for 2015 using the most conservative guidance numbers.

chart03

Over the past four quarters, the median price-to-FFO has been around 14. Following the guidance of 11 to 16 percent growth in 2015, I estimate that Q4 2015 FFO will be between 0.53 and 0.56, which leads us to a target share price between 29.70 and 31.20 U.S. dollars. The current price is 29.72 U.S. dollars (February 27, 2015).

In addition, looking at CyrusOne’s peers (QTS, COR, DLR, DFT, and EQIX), the median price-to-FFO is approximately 15. Performing the same calculation, I estimate the target share price at between 31.80 and 33.60 U.S. dollars. This range is indeed above the current price, but too close for comfort.

Of course, relying on a company’s guidance can be tricky – companies tend to stand on the conservative side of the spectrum. Last year CyrusOne released guidance numbers for 2014 that it easily beat. If CyrusOne beats its guidance as it did last year, the share price range will move up to 30.91 to 34.60 dollars per share.

As such, I don’t see CyrusOne as a buy opportunity at this moment, for any of the scenarios mentioned above. I’ll move on in my analysis to another data center REIT.