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On Thursday, Stifel analysts maintained their positive stance on Armada Hoffler Properties (NYSE:AHH), reiterating a Buy rating and a price target of $12.25. According to InvestingPro data, the stock currently trades near its 52-week low of $7.35, with a notable dividend yield of 7.61%. The stock appears undervalued based on InvestingPro’s Fair Value analysis, with 12 additional ProTips available for subscribers. In their latest research note, Stifel analysts focused on a selection of large-cap stocks, including ADP, PAYX, and IBM (NYSE:IBM), which are believed to possess defensive qualities that could lead to outperformance amid a market beset by heightened economic uncertainty and volatility. For deeper insights into defensive stocks and comprehensive analysis, investors can access detailed Pro Research Reports for over 1,400 US equities through InvestingPro.
According to Stifel, these companies share several financial traits, such as mid-single-digit (MSD) or higher revenue growth with a significant portion of recurring revenue, consistent margin expansion resulting in MSD to high-single-digit (HSD) earnings per share (EPS) growth, and a dividend yield in the range of 2-3%. These characteristics have contributed to their re-rating compared to the broader market and have led to their outperformance since the market peak in late February. Notably, AHH has maintained dividend payments for 13 consecutive years and currently maintains strong liquidity with a current ratio of 1.93.
The analysts also pointed out that while IBM may have more exposure to cyclical and international factors, its valuation and improving execution could offer a more appealing risk/reward balance. In addition to these large-cap names, Stifel highlighted TriNet Group (NYSE:TNET) within their small to mid-cap (SMID) coverage as a company with defensive attributes, but also as a self-help story with very low growth expectations currently priced into the market. For comprehensive valuation metrics and peer comparison tools across defensive stocks, visit InvestingPro.
In other recent news, Armada Hoffler Properties, Inc. announced a regular quarterly cash dividend of $0.14 per common share, payable on April 3, 2025, and a cash dividend of $0.421875 per share on its 6.75% Series A Cumulative Redeemable Perpetual Preferred Stock, payable on April 15, 2025. This decision aligns with the company’s strategic focus on quality assets and a conservative balance sheet, as stated by CEO Shawn Tibbetts. In addition, Armada Hoffler has expanded its Board of Directors with the appointment of Jennifer Boykin, a seasoned leader known for her transformative role at Huntington Ingalls (NYSE:HII) Industries and her significant contributions to STEM education and workforce development.
Furthermore, Armada Hoffler has amended its operating partnership agreement to introduce new terms for Performance LTIP Units, which will vest based on performance conditions. These units are designed to convert into Common Units, redeemable for cash or shares of the company’s common stock. The company’s Compensation Committee has granted Time-Based and Performance LTIP Units to executives Shawn J. Tibbetts and Matthew T. Barnes-Smith, valued at $850,000 and $325,000 respectively, for Time-Based Units and $750,000 and $300,000 respectively, for Performance Units. These executive awards are intended to align leadership incentives with shareholder interests and company performance. These developments reflect Armada Hoffler’s ongoing efforts to enhance its strategic direction and sustainable growth.
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