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Sunday, 12/05/2004

Flashback
By Nich Sheldon
BXP - Boston Properties Inc

Company Description

Boston Properties is a fully integrated, self-administered and self-managed real estate investment trust that develops, redevelops, acquires, manages, operates and owns a diverse portfolio of Class-A office, industrial and hotel properties. The Company is one of the largest owners and developers of Class-A office properties in the United States, concentrated in four core markets -- Boston, Midtown Manhattan, Washington, D.C. and San Francisco.

[Source: Company Press Release]

Reasons to Invest:

Just over six months ago, I featured an article entitled "A Cornucopia of Candidates." In that article, I wrote up Boston Properties (NYSE:BXP) as a watch list candidate. Since this write up, BXP has gained 16.58, or 36%. The stock has been rising through a tightly knit regression channel, testing the top and bottom bars of support/resistance along the way. After looking at Boston Properties chart, I feel that it is time to make it a true hypothetical portfolio candidate. Below you will find the original write-up posted on May 21st, followed by a brief synopsis of why I still like BXP as a dividend reinvestment plan.

Original Write-Up (May 21st, 2004)

Boston Properties Inc (NYSE:BXP) is the first candidate for the watch list. In the past four weeks BXP jumped to the middle of its industry in regards to price performance. This can be seen as a positive, especially since the stock was trading in the bottom ten percent of its industry over the past six months.

I also see a low risk rating on BXP for entries into their stock. They have a dividend percentage growth rate outlook of 3.73 percent over the next year, 7.01 percent over the next three years and 8.80 percent over the next five years. On top of that they expect their sales to grow by 10.53 percent over the next year, 13.76 percent over the next three years, and 20.58 percent over the next five years.

In February, Boston Properties, Inc signed two new leases in the Times Square Tower. The leases total 131,807 square feet, and are expected to be the new home of two additional prominent law firms.

BXP has a revised bullish price objective of 64.00 on their point and figure chart. While this estimate appears to be pretty high for a stock that has just recently bounced off of support at 43.00. I am optimistic that we could see returns to 55.00 by year-end and possibly onto the 64 range by next year.

BXP currently yields a hefty annual dividend of $2.60, or 5.78% per share owned. Their next dividend payout is tentatively scheduled for June 28th, 2004.

End Original Write-Up

While the past six months are behind us, I still see future growth in BXP for several reasons. First and foremost, BXP's track record has been impressive. After all the stock has set new all time highs for the past four consecutive months. In my initial write-up I noted that I expected to see BXP hit 55 by year-end. Low and behold here we are six and a half months later and the stock is pressuring its Point-and-Figure price objective of 64. Generally a price objective is revised (higher/lower) when the stock continues its trend straight through its price objective, and I see this happening fairly soon. Perhaps the only more interesting thing to note about the groove that Boston Properties is in is the fact that its underlying moving averages have served as support for the stock on nearly every retest.

Revenues for this real estate investment trust company are up 7% over the first three quarters of 2004. The increase in revenues is cited to be a direct reflection of higher rental rates on new leases and rollovers. BXP expect to see a full fiscal year 2005 EPS of $2.30-$2.45 and FFO of $4.10-$4.25 per diluted share. Analysts are estimating an FFO of $4.13 per diluted share for Boston Properties. Dividend percentage and sales percentage growth rates are the same as listed in the initial write-up.

Interestingly enough, Boston Properties ranks in the top 15-17 percent of its industry over the past 26 weeks, but they rank in the lower half of their industry over the past 13 weeks. I find this odd, especially since the company has yet to significantly pull out of its regression channel, and has continued to set new all-time highs over the past four months.

Lastly, I am intrigued by the fact that daily, weekly, monthly, quarterly, and yearly charts are show buy signals on the MACD and Stochastics indicators. Volume for the stock has remained positive, and the stock has an average true range (daily trading range average) of 1.11, which means that we should see movement on a daily basis, regardless of whether or not that movement is up or down.

The company still divvies out a $2.60 annual dividend per share owned.

Editor's Note:

I have received numerous emails from our faithful readers asking/requesting that I feature a DRIP that is worthy of investing in for a new grandchild. On top of that I have had repeated requests for my top three DRIP recommendations right now. I am currently working on an end-of-year article that features my top five for 2005. In that article I will dedicate one or two of those DRIPs towards companies that I expect would be a good investment for a new grandchild. Look for this article to be published near the end of December or beginning of January. I know you will find the information enjoyable and highly educational. Have a great week.

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.

Remember:
Plan your trade, and trade your plan.

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

Broker Recommendations

Strong Buy         2
Buy                4
Hold               9
Sell               2
Strong Sell        0

Brokers Covering  17


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

Min/Max Investment = $100-$25,000/quarter


Reinvestment Fees - 
Dividend investment fees: 0
Cash investment fees: 0
Auto reinvestment fees: 0


Transfer Agent:
BankBoston
888-485-2389


Corporate Headquarters:
111 Huntington Avenue
Boston, MA 02199
Phone: (617) 236-3300
Fax: (617) 536-3128



 
 

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