Q1 2013 Earnings Call

May 03, 2013 1:00 pm ET

Executives

Lisa R. Cohn - Executive Vice President, General Counsel and Secretary

Terry Considine - Chairman and Chief Executive Officer

Keith M. Kimmel - Executive Vice President of Property Operations

Ernest M. Freedman - Chief Financial Officer and Executive Vice President

Analysts

Karin A. Ford - KeyBanc Capital Markets Inc., Research Division

Jana Galan - BofA Merrill Lynch, Research Division

David Bragg - Zelman & Associates, LLC

Nicholas Joseph - Citigroup Inc, Research Division

Robert Stevenson - Macquarie Research

Michael J. Salinsky - RBC Capital Markets, LLC, Research Division

Buck Horne - Raymond James & Associates, Inc., Research Division

Jeremy Metz

Presentation

Operator

Welcome to the First Quarter 2013 Apartment Investment and Management Company Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over

Housing has served to quell prices generally over the past several years, but that's all changing now. With real estate prices clearly on the rise, this important sector with its many tentacles threatens to give lift to prices of all sorts.

Rental Rate Rise

The latest Consumer Price Index (CPI) published this past week for the month of January showed pricing for shelter up 0.2% month-to-month, and it was up 2.2% for the year. Not all of the increase was due to the real estate recovery, though. For instance, the real estate collapse almost immediately affected residential rental rates in an inflationary manner, because as homeownership diminished, shelter was still necessary. So, as demand for rentals increased, given limited supply, rental prices rose and they are still rising. The CPI report showed that rent and owner's equivalent rent increased by 0.2% in January 2013. That's good

Trying to get invested in a rallying market can be frustrating. If you missed a better opportunity, the last thing you want to do is dive in right before a stock pulls back. One of the things I like to do when recommending new buys is to avoid stocks that are extended, meaning that their rallies have persisted for a while and perhaps gone too far, taking the stock potentially to an area where many investors might take profits.

With this in mind, I decided to screen the S&P 500 for stocks showing some promising trends technically and fundamentally, with an eye as well on valuation. My goal was to find stocks that are performing well but that aren't trading too far from their 52-week lows.

Here is the screen I devised (using Baseline):

• Price within 10% of 52-week High
• Price within 35% of 52-week Low
• MTD Price Return >4%

Q4 2012 Earnings Call

February 08, 2013 1:00 pm ET

Executives

Lisa R. Cohn - Executive Vice President, General Counsel and Secretary

Terry Considine - Chairman and Chief Executive Officer

Keith M. Kimmel - Executive Vice President of Property Operations

Ernest M. Freedman - Chief Financial Officer and Executive Vice President

Analysts

Jana Galan - BofA Merrill Lynch, Research Division

Eric Wolfe - Citigroup Inc, Research Division

David Harris - Imperial Capital, LLC, Research Division

Richard C. Anderson - BMO Capital Markets U.S.

David Bragg - Zelman & Associates, LLC

Michael J. Salinsky - RBC Capital Markets, LLC, Research Division

Buck Horne - Raymond James & Associates, Inc., Research Division

Ryan Meliker - McNicoll, Lewis & Vlak LLC, Research Division

Robert Stevenson - Macquarie Research

Presentation

Operator

Good afternoon, and welcome to the Fourth Quarter 2012 Apartment Investment and Management Company Earnings Conference Call and

When selecting income investments, the three most important questions to answer are:

1. Is the investment increasing its dividend each year?
2. Is the increase likely to continue into the future?
3. Are you being compensated for the risk you are taking?

When you answer yes to all three of the questions, you just might have found an excellent income investment. Below are several dividend stocks yielding 4%, or more, that recently rewarded their shareholders with increased cash dividends.

Campus Crest Communities, Inc. (CCG), a real estate investment trust (REIT), engages in the ownership, development, building, and management of student housing properties under the Grove brand name in the United States. On Jan. 29, the company increased its quarterly dividend 3.1% to $0.66 per share. The dividend is payable on April 10, 2013, to all stockholders of record on March 27, 2013. The yield based on the new payout is

At the start of the housing revival, a majority of the growth was found in multi-family construction. That was of course due greatly to a struggling economy, tighter credit conditions and rising demand for rental units. While there's still a concentration of strength in the multi-family segment today, single-family housing is clearly participating in an intensifying manner as well. While I like all real estate over the short term, my perspective for the longer term favors real assets, including real estate, and rental unit providers, but not single-family home builders.

The latest Housing Starts data was published last week for the month of December 2012. It showed housing starts running at an annual pace of 954,000, well ahead of the economists' consensus forecast of 887,000 and November's pace of 851,000 (revised). Once again, there was strength in multi-family property construction, with starts of residential properties of 5

Q3 2012 Earnings Call

November 02, 2012 1:00 pm ET

Executives

Lisa R. Cohn - Executive Vice President, General Counsel and Secretary

Terry Considine - Chairman and Chief Executive Officer

Keith M. Kimmel - Executive Vice President of Property Operations

Ernest M. Freedman - Chief Financial Officer and Executive Vice President

John E. Bezzant - Executive Vice President of Transactions

Analysts

Robert Stevenson - Macquarie Research

Karin A. Ford - KeyBanc Capital Markets Inc., Research Division

Ryan Meliker - McNicoll, Lewis & Vlak LLC, Research Division

David Bragg - Zelman & Associates, LLC

Michael J. Salinsky - RBC Capital Markets, LLC, Research Division

Presentation

Operator

Welcome to the Third Quarter 2012 Aimco Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Lisa Cohn, Executive Vice President and General Counsel. Please go ahead.

The disaster now understood as Superstorm Sandy is wreaking havoc upon the economy and upon most industries, but one industry that keeps finding blessings where others are finding curse, wins again today. The construction industry and building supply companies should find support from what was perhaps the most destabilizing storm in the history of the Northeast.

The shares of the SPDR S&P Homebuilders (XHB) are up another couple percentage points Thursday, after gaining on Wednesday as well. Some $10 billion in property damage is approximated by experts as the result of Hurricane Sandy Frankenstorm. For an industry where new home supply is already scarce due to a long period of inactivity, this means business. Whether the large builders participate or not though, the building supply companies like Builders FirstSource (BLDR), Home Depot (HD), Lowe's (LOW), Beacon Roofing (BECN), USG (USG) and Masco (MAS) should make out big.

Home Properties (HME) owns, operates, acquires, and rehabilitates apartment communities in the Northeast, Midwest, and Mid-Atlantic markets in the United States. The company's stock is trading around $58.81 versus its 52-week range of $52.11-$66.98, up 8% in the last one year.

More importantly, the stock yields 4.5%. Compare this to Apartment Investment and Management (AIV), which yields 3%, and Avalon Bay Communities (AVB) which yields 3%.

The fundamentals that support the dividend yield:

1. As organic growth continues, the company reported Q2-2012 FFO of $0.96, higher than the consensus of $0.95. Additionally, the company has increased FY2012 FFO guidance by $0.07. A decrease in expenses, and better than expected performance in a weak economy has become a trend for the company
2. Occupancy is a solid 96.2%, which has been a steady increase by 70 bps from Q1-2012. Occupancy rate a year ago was 95.8%. Although low mortgage rates have been attractive

Investors seemingly can't get enough of residential/mortgage REITs. But should investors be concerned about reaching for yield in this group?

The residential REIT industry consists of REITs that own and manage housing, multi-family and apartment communities as well as mortgage REITs that invest in agency securities in which the principal and interest payments may be guaranteed by the government. The industry has been materially impacted by recent changes in the lending landscape, defaults, credit losses, and significant liquidity concerns during the recent global financial crisis.

The firms in this industry generally are not subject to federal taxes on their taxable income to the extent that they annually distribute all of their taxable income to stockholders. As a result of this business structure, many firms have elevated distribution yields, but almost all of them generate a return on tangible equity that is less than our estimate of their respective cost of

As many readers know, I have been questioning the valuations of many REITs recently [including the untouchable Realty Income (O)] as premiums to net asset value [NAV] and funds from operations (FFO) multiples are high. One sector that came into my crosshairs is the multifamily/apartment sector. Back in April I recommended a swap out of the apartment sector based on the following premise:

The rationale for this is straightforward: the massive shift from owning to renting has mostly occurred. While there is certainly more to go, the bulk of the shift has happened and outperformance going forward will be harder to achieve.

My opinion has not changed, rather it has become firmer. The following is a valuation table containing the larger and more liquid multifamily REIT, namely:

• AIMCO (AIV),
• Avalon Bay (AVB),
• BRE Properties (BRE),
• Camden Properties (CPT),
• Colonial Properties (CLP),
• Equity residential (EQR),
• Essex Property (ESS),
• Mid-America Apartment

The Federal Reserve on Thursday announced the much anticipated quantitative easing 3 (QE3). The announcement came amid the release of disappointing macroeconomic data on the U.S. labor market. The U.S. economy created fewer-than-expected jobs in the month of August. The U.S. unemployment rate has remained in proximity to 8%. Under the program, the central bank seeks to purchase mortgage-backed securities worth $40 billion, and keep the interest rates at the prevailing record low levels until the mid of 2015, instead of the previously announced end of 2014 time period. Experts believe this a big stimulus measure taken by the central bank to stimulate the sluggish U.S. economy.

Equity markets across the world have welcomed Ben Bernanke's move. U.S. markets rallied strongly on the news of the announcement of the launch of another round of bond buying by the central bank. The Dow Jones Industrial Average jumped by 1.55%, while

Inflation data that has been coming out of the Bureau of Labor Statistics has been quite muted over the last few years. Inflation expectations that surfaced after QE1 never materialized due to a softening economy that more than compensated for the extra liquidity in the system. Then when QE2 was initiated, there was yet another phase of high inflation expectations that still haven't materialized. Except of course in a few areas, one of which is in the agricultural sector (mostly due to severe drought conditions), and in the housing sector, specifically rentals.

One of the largest components of CPI is the Owners Equivalent Rent component which measures the level of rent you can currently receive for a primary residence. According to Investopedia, Owner's Equivalent Rent is

"The amount of rent that could be paid to substitute a currently owned house for an equivalent rental property. Owners' equivalent rent (OER) is

Here is a current overview of the best yielding stocks with a market capitalization of over $2 billion that have their ex-dividend date on the next trading day. So if your broker settles your trade today, you will receive the next dividend. A full list of all stocks with ex-dividend date can be found here: Ex-Dividend Stocks on August 15, 2012. In total, 73 stocks and preferred shares go ex-dividend - of which 40 yield more than 3 percent. The average yield amounts to 3.75%.

The ex-dividend date is a major date related to the payment of dividends. If you purchase a stock on its ex-dividend date or later, you will not receive the next dividend payment. Instead, the seller gets the dividend. If you purchase before the ex-dividend date, you get the dividend. It is important that your broker settles your trade before the ex-dividend date.

These are