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NorthStar Realty Finance (NRF) Target Lifted at FBR Capital on Upcoming Spin-Off and Higher Dividend

February 28, 2014 1:49 PM EST Send to a Friend
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Price: $16.92 -0.18%

Rating Summary:
    5 Buy, 0 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 23 | Down: 38 | New: 43
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FBR Capital analyst Daniel Altscher reiterated an Outperform rating on NorthStar Realty Finance (NYSE: NRF) and raised his price target from $16 to $18, noting a higher dividend payout at the REIT with the spin-off on track.

"NorthStar Realty Finance (NRF) reported 4Q13 CAD of $0.29, roughly in line with our $0.30. While results this quarter obviously matter, for us, it's all about the upcoming spin-off of NorthStar Asset Management (NSAM), which continues to be on track for a 2Q14 execution," Altscher said.

He added, "The company raised its 4Q13 dividend to $0.25, up from last quarter's $0.21, which now represents an 87% payout ratio on REIT level CAD, up from 2013's mid-70% level. We think this is significant as we expect investors to value the NorthStar REIT post-spin on a dividend yield basis, so a higher dividend payout ratio should lead to a higher valuation once the spin is actually completed. We think if there was any confusion as to why Jay Flaherty and NorthStar would enter into a healthcare partnership, investors are getting answers, as the upcoming acquisition of a $1.05 billion portfolio may not have been possible without it and could set up a potential future spin-off of this business sometime in 2014 or 2015."

For an analyst ratings summary and ratings history on NorthStar Realty Finance click here. For more ratings news on NorthStar Realty Finance click here.

Shares of NorthStar Realty Finance closed at $15.62 yesterday.




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