Zacks Analyst Blog Highlights: ProLogis, AMB Property, Mattel, Hasbro and Anadarko Petroleum - Press Releases

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Here are highlights from Tuesday's Analyst Blog:

China Restricts Foreign Real Estate Ownership

In a concerted move to restrict the inflows of speculative investment into its economy and ease inflationary pressures, China has imposed a new set of regulations limiting foreigners from buying residential or commercial property on the mainland.

The Chinese Ministry of Housing and Urban-Rural Development in association with the State Administration of Foreign Exchange issued a joint statement regarding the fresh rules that allow foreign companies to purchase only such commercial property, which are intended for their own use. In addition, the existing restrictions that limit foreign individuals from purchasing a single residential unit per person for self-use were reimposed.

Economists feel that this restrictive move would have minimal effect on the economy as a whole, as data from the National Bureau of Statistics reveals that foreign investments accounted for 0.8% of property development in Chinain 2009.

However, the lack of clarity about the proposed regulations could add an element of uncertainty to the real estate market in China, which is rife with issues such as volatility and sharp increases in property values.

Industry experts believe that the new restrictions are aimed to keep a tight rein on capital inflows into the real estate market to clamp down on illegitimate investments in the property market and avert an asset bubble. Property prices in China had increased 9.1% and 8.6% in September and October 2010 respectively compared to the year-earlier period.

Investors are speculating that under the new rules, government might prevent a foreign investor from paying an astronomical price for an office building on one hand and approve huge redevelopment costs on a dilapidated asset on the other.

The recent developments could hamper the long-term plans of U.S. REITs (Real Estate Investment Trusts) such as ProLogis PLD and AMB Property Corp. AMB that have significant interests in the mainland. Nevertheless, the U.S. REITs and private equity firms that have invested in Chinese real estate companies are presently keeping a close tab on the developments and waiting for the uncertainty to pan out.

Mattel to Repurchase Shares

Mattel Inc. (MAT) recently announced a new share repurchase program and increased its dividend, which will be changed to a quarterly from an annual basis, beginning 2011.

Mattel received authorization from its board to increase its previously announced share repurchase program by an additional $500 million. The program has no expiration date. Mattel repurchased about 117 million shares of common stock for an aggregate of approximately $2.3 billion since the inception of the program in February 2003.

During the recently concluded third quarter, Mattel bought back 2.0 million shares for $42 million, at an average price of just over $21.49. Year-to-date, the company has repurchased 7 million shares for $153 million, at an average price per share of $21.89.

The California-based toy company has also decided to hike its annual dividend by 8 cents to 83 cents per share. This translates into a 10.7% increase from the prior dividend. The increased dividend is payable on December 16, 2010, to shareholders of record December 3, 2010. Additionally, the company's dividends will be paid on a quarterly instead of an annual basis from the upcoming fiscal year.

The new dividend brings the forward annual dividend yield as of November 15, 2010, to 3.52%, which inched past the industry average of 3.39%. Mattel's forward annualized dividend yield also remains ahead of its closest competitor Hasbro Inc.'s (HAS) 2.12%.

The company had left its dividend unchanged since 2007 at 75 cents per share, due to the economic downturn in 2008. We believe resurgence in the macro economy and a stable balance sheet position prompted the company to raise its dividend.

Anadarko Neutral Again

We recently retained our Neutral recommendation on Anadarko Petroleum Corporation (APC).

Texas based Anadarko Petroleum has a deep and diversified asset base comprising unconventional resources, which provide the company with substantial growth potential over the medium-to-long term. Additionally, the company's low-risk and predictable production profile reflects a visible upside potential going forward.

One of the largest independent oil and natural gas exploration and production (E&P) companies of the world, Anadarko engages in the exploration, development, production, gathering, processing and marketing of natural gas, crude oil, condensate and natural gas liquids (NGLs). The company's assets are primarily situated in the United States, with additional facilities in Algeria, Brazil, China, Indonesia, Mozambique and Ghana.

Anadarko's project management expertise is considered to be among the best in the industry. It has a proven track record of identifying and executing high-impact projects. Additionally, the company also remains committed to the execution of its worldwide exploration, appraisal and development programs, with a sound capital expenditure program in place.

Of its 2010 capital budget, Anadarko estimates spending 65% on development activities, 25% on exploration activities and 10% on gas-gathering and processing activities and other business activities.

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