Vornado Realty Trust (NYSE:VNO) trades around $81.18 versus its 52-week range of $70-$88.50, up 7% in the past 1-year. The stock is trading at a FFO multiple of 16 times the consensus FFO of $4.96. The stock yields 3.4%. Others in its peer group such as Boston Properties (NYSE:BXP) yields 2%, and Brookfield Office Properties (NYSE:BPO) yields 3.5%.
The chart below compares share performance over the past year. "D"s mark dividends paid.
Fundamentals that support Vornado's dividend payout:
The Balance sheet consists of cash & marketable securities of $940 million, and $10 billion in consolidated debt. All the public unsecured debt comes due 2015 and after. The company is in compliant with all its debt covenants as of June 30th, 2012.
Vornado has a diversified portfolio of tenants with the U.S. government contributing 6% of annualized revenues. None of the other tenants contribute more than 1.5% to annualized revenues.
Vornado continues on its success of disposition of properties. The company is expected to complete a total of $2 billion in 2012. This is a hefty intake of cash for the company.
New York contributes 55% to the company's EBITDA. Occupancy in New York office remains at a high of 95.4%, and New York Retail stays at a high of 94.5%. Both still provide potential for growth given the rent increase of 4.5% in NY office space, and 3.1% in NY retail space.
Conclusion: Vornado has one of the best balance sheets in the office space with various forms of capital available to the company. Also, it is focused on markets that have potential for growth and long-term stability. In this low interest rate environment, and a volatile fundamental environment, it is hard to find extra income to add to our portfolios. Vornado Realty Trust provides an attractive yield in a high quality REIT. It is an attractive yield for income-oriented investors.
Vornado realty is expected to report earning on November 1st, 2012
Written by Kapitall's Sabina Bhatia. Tool provided by Kapitall.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Business relationship disclosure: Business relationship disclosure: Kapitall is a team of analysts. This article was written by Sabina Bhatia, one of our writers. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.