By
Brian D. Pacampara
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More Articles
July 12, 2011
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Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, office REIT Boston Properties (NYSE: BXP ) has received the dreaded one-star ranking.
With that in mind, let's take a closer look at Boston Properties' business and see what CAPS investors are saying about the stock right now.
Boston Properties facts
| Headquarters (Founded) |
Boston (1970) |
| Market Cap |
$15.8 billion |
| Industry |
Office REIT |
| Trailing-12-Month Revenue |
$1.6 billion |
| Management |
Co-Founder/Chairman/CEO Mortimer Zuckerman
CFO Michael LaBelle
|
| Return on Equity (Average, Past 3 Years) |
3.7% |
| Cash/Debt |
$747.3 million / $7.9 billion |
| Dividend Yield |
1.8% |
| Competitors |
Mack-Cali Realty (NYSE: CLI )
SL Green Realty (NYSE: SLG )
Vornado Realty Trust (NYSE: VNO )
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Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 49% of the 327 members who have rated Boston Properties believe the stock will underperform the S&P 500 going forward. These bears include investorpoet2 and kurtdabear.
Late last month, investorpoet2 touched on Boston Properties' seemingly unsustainable valuation: "High quality REIT with a strong balance sheet, but headwinds in real estate are not over. BXP has a [funds from operations yield] of 4.28% and a dividend of 1.90%, which indicate lackluster returns for the next several years."
In fact, Boston Properties currently sports a particularly lofty price-to-cash flow of 34. That represents a premium to other office REITs like Mack-Cali (14), SL Green (20), and Vornado (26).
CAPS member kurtdabear elaborates on the Boston Properties bear case:
Office vacancies are high and rising in most of BXP's markets, with Washington, D.C. being the main exception (for obvious reasons); and dividends are running way ahead of income. Something's got to give, and I think it's going to be BXP's value, as rents and property values begin to erode from lack of demand.
What do you think about Boston Properties, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!
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