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Friday, 07/30/2004

Real Estate Escape
By Nich Sheldon
ASN - Archstone-Smith Trust

Company Description

Archstone-Smith (NYSE: ASN) is a recognized leader in apartment investment and operations. With a current total market capitalization of $10.8 billion, Archstone-Smith owns and operates an irreplaceable portfolio of high-rise and garden apartment communities concentrated in many of the most desirable neighborhoods in the greater Washington, D.C. metropolitan area, Southern California, the San Francisco Bay area, Chicago, Southeast Florida, Boston, Seattle and the greater New York City metropolitan area. The company continually upgrades the quality of its portfolio through the selective sale of assets, using proceeds to fund investments with even better growth prospects. Through its two brands, Archstone and Charles E. Smith, Archstone-Smith strives to provide peace of mind for its customers -- backed by unconditional 100% satisfaction guarantees. As of May 31, 2004, Archstone-Smith owned or had an ownership position in 255 communities, representing 88,156 units, including units under construction.

[Source: Company Press Release]

Reasons to Invest:

This weeks Drip of the Week is Archstone-Smith Trust (NYSE:ASN). This service sector DRIP falls under the real estate operations industry and is due to report earnings on August 6th. Estimates show the company is ready to report $0.11 cents over the previous years Q2 announcement of $0.34. I am speculating that the company meets or beats these estimates, as they continue to see growing profits in the renters market.

I see a low risk rating on this dividend bearing company, and find it enticing that their dividend percentage growth rate over the next five years is at 4.23 percent. Sales percentage growth rates are estimated to be around 4.48 percent over the next year, 9.72 percent over the next three years, and 11.88 percent over the next five years.

ASN ranks in the top 25% of its industry over the past 4 weeks, down marginally from their past 13 week rating, which notes the company in the top ten percent of the industry.

Their traditional, 3-box reversal Point and Figure chart notes a bullish price objective of 49, approximately 20 points higher than today's close at 29.43. I am speculating a move up to 35 by year end and 42 by the end of next year, which bodes well for us dividend re-investors, who like relatively inexpensive DRIPs.

I also like the up-tick regression channel, which was formed in February of last year. The stock fell out of this channel in April and May but rebounded quickly, setting a new seven-year all-time high of 30.73 on July 20th. Since there is no psychological support levels overhead, I have set my expectations pretty high for the stock, and speculate that my expectations are not too far-fetched.

Like last week's DOTW, this company also allows auto- reinvestment, foreign accounts and temper enrollment for FREE. This saves us a little hypothetical loot with every transaction!

Currently ASN divvies out an annual dividend of 1.72/share, tallying out to a 5.94 percent dividend yield. This means if we can gain 5-8 percent over the next four months we will achieve 10 percent on this plan by year-end, after cashing in on two dividend payments.

This ends another exciting episode of the DripAdvisor.com Drip of the Week. Stay tuned next week, as we will spotlight another stock worthy of the DripAdvisor.com limelight.

Until Next Week,
Nich Sheldon
Editor
www.dripadvisor.com
questions@DripAdvisor.com

Broker Recommendations

Strong Buy         3
Buy                3
Hold               9
Sell               3
Strong Sell        0

Brokers Covering  18


DRIP Information:
Shares to Qualify = 1
Auto-reinvestment = Yes
Accept Foreign Accounts: Yes
Temper Enrollment: Yes

Min/Max Investment = $200-$5,000/month


Reinvestment Fees - 
Dividend investment fees: $0.00
Cash investment fees: $0.00
Auto reinvestment fees: $0.00


Transfer Agent:
ChaseMellon
800-461-9257


Corporate Headquarters:
9200 E. Panorama Circle, Suite 400
Englewood, CO 80112
Phone: (303) 708-5959
Fax: (303) 708-5999



 
 

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