Is it Wise to Hold Regency Centers Stock in Your Portfolio Now?

Regency Centers Corp. REG stands to benefit from a well-located portfolio of high-quality shopping centers primarily situated in affluent suburbs and urban-adjacent trade areas with strong consumer purchasing power. Its emphasis on grocery-anchored properties provides consistent foot traffic and income stability. Favorable retail real estate conditions are supporting robust tenant demand, boosting leasing momentum, occupancy and rental rate expansion. During the third quarter, Regency executed approximately 1.8 million square feet of comparable new and renewal leases, achieving a blended cash rent spread of 12.8%. Strategic acquisitions and a promising development pipeline support sustained growth over the long term. Nonetheless, rising e-commerce penetration presents competitive challenges. High debt burden and geographic concentration of assets in select markets add to its woes.While shares of Regency have declined 1.3% in the past month against the industry’s growth of 1.0%, analysts seem bullish on this Zacks Rank #3 (Hold) company. The Zacks Consensus Estimate for its 2025 and 2026 FFO per share has moved marginally northward over the past three months to $4.61 and $4.80, respectively.Image Source: Zacks Investment ResearchWhat's Aiding REG?Regency Centers stands out with a high-quality portfolio of open-air shopping centers, more than 85% of which are grocery-anchored. This focus on necessity-driven retail ensures steady foot traffic and resilience in uncertain markets, with leading grocers forming the backbone of its tenant base.Strategically located in affluent suburbs and near key urban trade areas, Regency’s centers attract top-tier grocers and retailers. Best-in-class operators continue to expand within its premium properties. Anchor tenants comprised 42% (based on pro-rata ABR) of its portfolio as of Sept. 30, 2025. Regency’s embedded rent escalators have also been a key driving factor behind its rent growth. In the third quarter of 2025, same-property base rents contributed 4.7% to same-property net operating income (NOI) growth.Regency is actively enhancing its footprint through targeted acquisitions and development. In the third quarter of 2025, it acquired a portfolio of five shopping centers in Rancho Mission Viejo, Orange County, CA, for $357 million. Ongoing redevelopment and development projects carry estimated net costs of $668 million, with 51% already invested, positioning the company for future growth.The balance sheet is strong, featuring $1.5 billion of revolving credit capacity, 5.3X net debt plus preferred stock-to-EBITDAre, and a fixed charge coverage ratio of 4.2. Nearly 87% of wholly owned assets are unencumbered, and investment-grade ratings from Moody’s (A3) and S&P (A-) support low-cost access to debt.Regency’s shareholder-friendly approach is evident in its dividends. In October 2025, it raised its quarterly payout to 75.5 cents, a 7.1% increase. The company increased its dividend five times in the past five years, and its payout has grown 3.96% over the same time period. With a 62% payout ratio, the dividend remains sustainable, reflecting the company’s strong operations, growth prospects and financial stability. Check Regency Centers’ dividend history here.What’s Hurting REG?The market is witnessing a shift in retail shopping from brick-and-mortar stores to internet sales. Particularly, the efforts of online retailers in recent years to go deeper into the grocery business have emerged as a concern for this REIT that focuses on building a premium portfolio of grocery-anchored shopping centers. This is expected to adversely impact the market share for brick-and-mortar stores. This is likely to lead to a lesser scope for the company to increase rents and hurt occupancy growth.Regency has a substantial debt burden, with total debt of approximately $4.92 billion as of Sept. 30, 2025. With a high level of debt, interest expenses are likely to remain elevated. Interest expenses for the third quarter of 2025 jumped 9% year over year to $51.3 million.Stocks to ConsiderSome better-ranked stocks from the retail REIT sector are Tanger Inc. SKT and Phillips Edison & Company, Inc. PECO. Both Tanger and Phillips Edison carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for Tanger’s 2025 FFO per share has been raised marginally over the past two months to $2.28.The consensus estimate for Phillips Edison & Company’s 2025 FFO per share has been revised upward marginally to $2.59 over the past month.Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.Quantum Computing Stocks Set To SoarArtificial intelligence has already reshaped the investment landscape, and its convergence with quantum computing could lead to the most significant wealth-building opportunities of our time.Today, you have a chance to position your portfolio at the forefront of this technological revolution. In our urgent special report, Beyond AI: The Quantum Leap in Computing Power, you'll discover the little-known stocks we believe will win the quantum computing race and deliver massive gains to early investors.Access the Report Free Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Regency Centers Corporation (REG): Free Stock Analysis Report Tanger Inc. (SKT): Free Stock Analysis Report Phillips Edison & Company, Inc. (PECO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks