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Should You Add Prologis (PLD) Stock to Your Portfolio Now?
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Amid economic expansion, e-commerce boom and heightened urbanization, companies are shifting their strategy toward services like same-day delivery and other such options, propelling demand for warehouse distribution facilities. Further, with a larger customer base, companies are opting for supply-chain consolidation, resulting in higher demand for logistics infrastructure and efficient distribution networks, thus creating scope for industrial real estate market.
Therefore, it is the right time to add a few industrial REITs to your portfolio. Today, we bring one such stock – Prologis Inc. (PLD - Free Report) – that continues to display robust fundamentals and improving prospects.
Last month, backed by growth in revenues and occupancy gains, Prologis reported first-quarter 2017 core funds from operations (FFO) per share of 63 cents, beating the Zacks Consensus Estimate by a penny. The figure also improved from the year-ago quarter figure of 61 cents.
Further, this industrial REIT raised the core FFO per share outlook for full-year 2017 amid solid operating fundamentals, increased deployment from investments in its ventures and higher net promote income.
Notably, demand for the company’s facilities in the first quarter was stemmed by growth in the housing, construction and e-commerce businesses. Moreover, market conditions in Europe continue to improve. In addition, Prologis remains focused on bolstering its liquidity.
Further, this Zacks Rank #2 (Buy) stock has risen over 15.1% over the past one year, compared with the 0.2% decline experienced by the Zacks categorized REIT and Equity Trust - Other industry.
Why a Solid Choice?
Revenue Strength: Prologis’ top line has exhibited strength for the past several quarters. In fact, since third-quarter 2015 through first-quarter 2017, the company reported better-than-expected revenue figures in each of the quarters.
Cash Flow Growth: Prologis enjoyed a historical cash flow growth (3–5 years) of 30.82%, which comfortably exceeded the industry’s growth of 18.63%. Also, its current cash flow growth of 22.54% is way ahead of the industry’s rate of 15.66%.
FFO per Share Growth: Prologis witnessed 7.37% growth in funds from operations (FFO) per share over the last three to five years, against 2.72% of that of the industry. Additionally, FFO per share are estimated to grow at the rate of 7.25% for 2017, which is way ahead of the industry average of 2.42%.
Strong Leverage: The debt-to-equity ratio for Prologis is 0.62 compared with the industry average of 0.83. This highlights greater financial stability for the company and lesser risk for shareholders.
Equity LifeStyle Properties currently has a long-term growth rate of 4.7%.
Omega Healthcare has been a steady performer, having surpassed the Zacks Consensus Estimate in the past four trailing quarters, with an average beat of 4.26%.
Moreover, PS Business Parks’ estimates for 2017 FFO per share climbed 1.2% to $5.93, over the past 30 days.
Note: All EPS numbers presented in this write up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500. See today's Zacks "Strong Sells" absolutely free >>.
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Should You Add Prologis (PLD) Stock to Your Portfolio Now?
Amid economic expansion, e-commerce boom and heightened urbanization, companies are shifting their strategy toward services like same-day delivery and other such options, propelling demand for warehouse distribution facilities. Further, with a larger customer base, companies are opting for supply-chain consolidation, resulting in higher demand for logistics infrastructure and efficient distribution networks, thus creating scope for industrial real estate market.
Therefore, it is the right time to add a few industrial REITs to your portfolio. Today, we bring one such stock – Prologis Inc. (PLD - Free Report) – that continues to display robust fundamentals and improving prospects.
Last month, backed by growth in revenues and occupancy gains, Prologis reported first-quarter 2017 core funds from operations (FFO) per share of 63 cents, beating the Zacks Consensus Estimate by a penny. The figure also improved from the year-ago quarter figure of 61 cents.
Further, this industrial REIT raised the core FFO per share outlook for full-year 2017 amid solid operating fundamentals, increased deployment from investments in its ventures and higher net promote income.
Notably, demand for the company’s facilities in the first quarter was stemmed by growth in the housing, construction and e-commerce businesses. Moreover, market conditions in Europe continue to improve. In addition, Prologis remains focused on bolstering its liquidity.
Further, this Zacks Rank #2 (Buy) stock has risen over 15.1% over the past one year, compared with the 0.2% decline experienced by the Zacks categorized REIT and Equity Trust - Other industry.
Why a Solid Choice?
Revenue Strength: Prologis’ top line has exhibited strength for the past several quarters. In fact, since third-quarter 2015 through first-quarter 2017, the company reported better-than-expected revenue figures in each of the quarters.
Cash Flow Growth: Prologis enjoyed a historical cash flow growth (3–5 years) of 30.82%, which comfortably exceeded the industry’s growth of 18.63%. Also, its current cash flow growth of 22.54% is way ahead of the industry’s rate of 15.66%.
FFO per Share Growth: Prologis witnessed 7.37% growth in funds from operations (FFO) per share over the last three to five years, against 2.72% of that of the industry. Additionally, FFO per share are estimated to grow at the rate of 7.25% for 2017, which is way ahead of the industry average of 2.42%.
Strong Leverage: The debt-to-equity ratio for Prologis is 0.62 compared with the industry average of 0.83. This highlights greater financial stability for the company and lesser risk for shareholders.
Stocks to Consider
Other favorably placed stocks in the REIT space include Equity LifeStyle Properties, Inc. (ELS - Free Report) , Omega Healthcare Investors, Inc. (OHI - Free Report) and PS Business Parks, Inc. . All the three stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Equity LifeStyle Properties currently has a long-term growth rate of 4.7%.
Omega Healthcare has been a steady performer, having surpassed the Zacks Consensus Estimate in the past four trailing quarters, with an average beat of 4.26%.
Moreover, PS Business Parks’ estimates for 2017 FFO per share climbed 1.2% to $5.93, over the past 30 days.
Note: All EPS numbers presented in this write up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500. See today's Zacks "Strong Sells" absolutely free >>.