Back to top

Image: Bigstock

Here's How Much a $1000 Investment in Prologis Made 10 Years Ago Would Be Worth Today

Read MoreHide Full Article

How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.

The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.

What if you'd invested in Prologis (PLD - Free Report) ten years ago? It may not have been easy to hold on to PLD for all that time, but if you did, how much would your investment be worth today?

Prologis' Business In-Depth

With that in mind, let's take a look at Prologis' main business drivers.

Prologis Inc. is a leading industrial real estate investment trust (REIT) that acquires, develops, operates and manages industrial real estate space in the Americas, Asia and Europe. The company principally targets investments in distribution facilities for customers who are engaged in global trade and depend on efficient movement of goods through the global supply chain.

As of Jun 30, 2021, Prologis owned or had investments in properties and development projects aggregating around 995 million square feet of space in 19 countries, either on a wholly-owned basis or through co-investment ventures. Modern distribution facilities are being leased by the company to around 5,500 customers. These customers belong to two main categories — business-to-business and retail/online fulfilment.

The company has been actively banking on its growth opportunities through acquisitions and developments. In February 2020, Prologis accomplished the $13-billion acquisition of Liberty Property Trust in an all-stock deal, including the assumption of debt. The acquisition resulted in addition of a logistics operating portfolio spanning 108 million square feet of space. Furthermore, through this buyout, Prologis added 4.9 million square feet of logistics development in progress. Also, it brought in 1,748 acres of land for future logistics development with build-out potential of 20.5 million square feet and 3.8-million-square-foot office operating and development portfolio.

Moreover, in October, the company accomplished the sale of a portfolio of buildings and land in the U.K. to real estate funds managed by Blackstone for £473 million ($618 million). The move marked the largest sale of logistics real estate assets on record in the U.K. Majority of these assets were acquired from Liberty Property Trust.

Note**: All EPS numbers presented in this report 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.

Bottom Line

While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Prologis ten years ago, you're probably feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in September 2011 would be worth $5,025.16, or a 402.52% gain, as of September 2, 2021. Investors should keep in mind that this return excludes dividends but includes price appreciation.

The S&P 500 rose 275.62% and the price of gold increased -4.59% over the same time frame in comparison.

Analysts are forecasting more upside for PLD too.

Shares of Prologis have outperformed the industry in the past three months. The estimate revision trend of 2021 funds from operations (FFO) per share indicates a favorable outlook for the company as estimates have been revised marginally upward over the past week. Its second-quarter results reflected all-time low vacancies in its markets that aided rent growth and valuation increases. Along with the fast adoption of e-commerce, logistics real estate is anticipated to gain from a likely rise in inventory levels and given Prologis’ capacity to offer high-quality facilities in key markets and robust balance-sheet strength, it is well poised to bank on these trends. Yet, rising supply in several markets might fuel competition and curb pricing power. Stabilization of e-commerce sales growth and more modest demand are concerns for rent hikes.

Shares have gained 6.90% over the past four weeks and there have been 9 higher earnings estimate revisions for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.

In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Prologis, Inc. (PLD) - free report >>

Published in