It has been almost six months since I provided an update on one of my positions that has been in my income portfolio for some time, BioMed Realty Trust (BMR). My last synopsis of how the company was doing was back in August last year when the shares were trading at around $18 a share. The stock is now over $21 and still provides an over 4% yield. It also picked up a key upgrade this week and the shares look like they still have slow but steady upside in them.
Recent news on BMR:
- Keybanc upgraded the stock from "Hold" to "Buy" while raising the price target from $20 to $24 a share. The analyst firm cited the 500 basis point improvement in occupancy over the past five quarters and the robust activity in the life science space by private capital that bodes well for future occupancy gains for its upgrade.
- It is completing a $260mm capital raise at $20.50 to pay for a recent property acquisition that should be accretive to cash flow going forward.
- Consensus earnings estimates for FY2013 have risen by two pennies a share to $1.39 over the last two months.
BioMed Realty Trust operates as a real estate investment trust that focuses on providing real estate to the life science industry in the United States.
Four additional reasons this is a solid pick up for an income portfolio at $21 a share:
- BMR yields 4.5% and has more than doubled distribution payouts since climbing out of the financial crisis in 2009.
- It has steadily and consistently increased operating cash flow (OCF) over the last few years. OCF is up some 50% since FY2010.
- The company was able to generate an over 15% revenue increase in FY2012. Analysts expect high single digits sales gains in FY2013.
- BMR investment portfolio is focused on life science and biotech properties in the seven core U.S. life science areas (Boston, San Francisco, etc…). This is a solid space to be in for the reasons cited by Keybanc.