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Kimco Realty Corporation Is Overvalued

Apr. 04, 2022 1:21 PM ETKimco Realty Corporation (KIM)10 Comments
Braun Capital profile picture
Braun Capital


  • Kimco Realty has made a good bounce back from the pandemic.
  • The dividend and dividend payout ratio are particularly attractive.
  • The current price of the KIM stock may be high but compared to some of its peers, the P/FFO multiple is low.
  • Q4 2021 results were solid, and the outlook for the company looks bright.
  • Despite good earnings results and strong dividend history, other REITs such as Simon Property Group are better buys.

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This article was written by

Braun Capital profile picture
Braun Capital is a private research firm that researches and publishes stock analyses on various companies. All pieces are written by company analysts and represent their respective opinions. The firm holds no positions. Follow us on Twitter @BraunCapital to stay up to date with our work.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (10)

Braun Capital profile picture
Braun Capital
Article Update 04 Apr. 2022
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There are a number of inaccuracies and strange analyses that are missing aspects of what you are writing about. I am guessing you are young, and enthusiastic about investment analysis? If that is the case, that is awesome, and I wish I had the same enthusiasm at the same age.

Other posters have pointed some of these things out, and I would recommend some edits, but also recommend spending some time understanding the particulars on REITs in general, and the commercial real estate industry before writing about them (i.e. capitalization rates). Couple of things to point out:

-KIMCO's costs basis in Albertson's is roughly $100 million, and came as the result of the Albertson's restructure during bankruptcy. It's valuation exceeds $1.2 billion in current market valuation. A pretty great return so far.
-Doing a 'NAV' valuation based on net assets less liabilities and then dividing the resulting valuation by the shares outstanding doesn't work for REITS much less any equity, as assets reflected on the balance sheet for heavy concentrations of real estate only takes into consideration the cost of the real estate, and is net of depreciation. Cost and value are wildly different across the various segments of real estate, and using this approach doesn't take into consideration the leased value of real estate. In many cases, the valuation versus cost can be as high as double depending on the circumstances.
-KIMCO as other posters have mentioned is not a mall Reit. They are grocery anchored retail centers. A quick Google search will pull up their appropriate peers, in which case you should look at the the peer underlying metrics to determine how they stack up.
-SPG having a 'NAV' of $3 billion and change is humorous, as you are then valuing 191 million square feet of class A mall space at $17.50 per square foot....

That being said, KIMCO could look fairly valued at today's prices...
Why compare KIM to a mall reit like SPG , makes no sense and throws doubt into the whole article. KIM has plenty of peers you could have compared is against - BRX and REG are two that would be much better for comps
Audit72 profile picture
Reached the same overvaluation conclusion and liquidated all of my KIM shares at the end of March.
05 Apr. 2022
"Kimco vs. Peers"
Peers ? SPG ? O ? Really ?

Ok little boy, stop trying to talk about things you don't understand.
Kimco didn't purchase $1.2 billion of Albertsons stock in 2021. They have had that stock for Years. Their restrictions on selling the shares are expiring (finally)
FRT has dividend issues...but is an Aristocrat?
Also - you say Simon could be in serious trouble with their debt....but the credit agencies give them pretty much the best rating in the real estate industry

I agree that at $11-12 a share Kimco would be a great Value stock
ISTJ Investor profile picture
"Kimco is a great mall operating REIT..." Not a mall.
@ISTJ Investor agree, still the author will attract newbies in the REIT space.
Thanks, Braun Capital, for your analysis and observations. It's always good to read the counterpoint analysis for the investment thesis for any of my investments. That said, I will continue to hold and dividend reinvest in KIM as it continues to grow and grow its dividend.
With KIM I am holding but nibbling on dips.
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