Is it Prudent to Add Regency Centers Stock to Your Portfolio Now?

Regency Centers Corp. REG seems well-poised to gain from its strategically located premium portfolio of grocery-anchored shopping centers. Strategic buyouts and an encouraging development pipeline bode well for long-term growth. A healthy balance sheet provides financial flexibility for portfolio expansion. However, growing e-commerce adoption, elevated interest rates and a concentrated portfolio raise concerns.Last month, this retail real estate investment trust (REIT) announced the acquisition of Brentwood Place Shopping Center, a premier retail destination in Brentwood, TN. The move aligns with REG’s efforts to improve its portfolio quality with investments in high-growth markets like Nashville.Analysts seem bullish on this Jacksonville, FL-based Zacks Rank #2 (Buy) company. The Zacks Consensus Estimate for its 2025 FFO per share indicates a favorable outlook, as it has moved marginally upward over the past month to $4.54.Shares of Regency have risen 16.2% in the past year, against the industry's 2.2% decline. Given its solid fundamentals and positive estimate revisions, the stock is likely to keep performing well in the quarters ahead.Image Source: Zacks Investment ResearchWhat's Aiding REG?Regency’s premium shopping centers are situated in affluent suburban areas and near the urban trade areas where consumers have high spending power, enabling the company to attract top grocers and retailers. Anchor tenants comprised 42.4% (based on pro-rata ABR) of its portfolio as of Dec. 31, 2024.Moreover, the company has a high-quality open-air shopping center portfolio, with more than 80% grocery-anchored neighborhood and community centers, which ensures dependable traffic. Six of Regency’s top 10 tenants are high-performing grocers. The focus on necessity, service, convenience and value retailers serving the essential needs of the communities provides Regency with a strategic advantage.Regency Centers is making efforts to improve its portfolio via acquisitions and developments in key markets. In 2024, Regency acquired properties for a total value of $92 million at the company’s share. Following REG’s impressive execution in 2024, with more than $250 million of development and redevelopment starts, management expects to drive a similar level of success in 2025. The company is also disposing of non-core assets and using the proceeds to buy value-accretive investments. Given REG’s prudent financial management, it is well-poised to explore growth opportunities.Regency Centers maintains a healthy balance sheet position. As of Dec. 31, 2024, this retail REIT had nearly $1.4 billion of capacity under its revolving credit facility. As of the same date, its pro-rata net debt and preferred stock to operating EBITDAre was 5.2X. In February 2025, S&P Global Ratings raised its credit ratings to ‘A-’ with a stable outlook for the company, resulting in a boost to lenders’ confidence. Moreover, investment-grade credit ratings of A3 from Moody’s render it access to the debt market at favorable costs.Solid dividend payouts are the biggest attraction for REIT investors, and Regency Centers is committed to boosting shareholder wealth. In November 2024, the company declared a quarterly cash dividend payment on its common stock of 70.5 cents, an increase of 5.2% from the prior quarter's dividend. From 2014 to the fourth quarter of 2024, REG’s dividend witnessed a CAGR of 3.7%. In the last five years, the company has increased its dividend four times. Check Regency Centers’ dividend history here.What’s Hurting REG?The market is witnessing a shift in retail shopping from brick-and-mortar stores to internet sales. This is expected to adversely impact the market share of retail REITs, including Regency Centers.Further, a high interest rate environment may dampen consumer sentiments, affecting demand for retail space. This is likely to lead to a lesser scope for the company to increase rents and hurt occupancy growth.Regency Centers’ properties in California and Florida accounted for 23.1% and 18.9%, respectively, of its annual base rents as of Dec. 31, 2024. This makes the company’s operating results and financial conditions susceptible to any unfavorable fluctuations in these markets.Other Stocks to ConsiderSome other top-ranked stocks from the retail REIT sector are EPR Properties EPR and Tanger Inc. SKT, each carrying a Zacks Rank of #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for EPR Properties’ 2025 FFO per share is pegged at $5.02, indicating 3.7% growth from the prior-year quarter’s tally.The Zacks Consensus Estimate for Tanger’s ongoing year’s FFO per share is pegged at $2.26, implying year-over-year growth of 6.1%.Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Regency Centers Corporation (REG): Free Stock Analysis Report Tanger Inc. (SKT): Free Stock Analysis Report EPR Properties (EPR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks