Top 3 stock bets for the real estate sector

7:15 am ET, 24 Apr 2019

Disclaimer: The following bite is my perspective on investing in real estate companies; it is not an endorsement or a recommendation for investors to buy, sell or short any stock.  

The Real Estate sector grew 11% in the past 12 months.  Relative to the broader equity market, real estate did better by 1%.

There is a perception that the real estate sector is at the top of the market.  So what real estate stocks are good investment candidates?  Here are my top picks.  I don't recommend buying (or selling) these stocks--they are just a few securities where I see an upside and potential for strong revenue growth.  

1.  Macerich (MAC)

Macerich Company (MAC) is my top pick.  This real estate investment company is listed as the third biggest owner of various shopping centers in the US. There has been a growth of 10% in sales per square foot of Macerich-run shopping centers.  

The company witnessed a reduction of the occupancy cost by 12.4%.  It also started double-digit re-leasing spreads that led to income growth of over 4%.

Various tenant closures have led to Macerich's recent underperformance.  This can cause a negative impact on the company's cash flow this year. But if we consider the closures as an opportunity to replace current tenants, notable returns can be achieved in the upcoming period.

Over the last month, Macerich Company (MAC) returned +0.65%. Macerich Company (MAC) average analyst price target is 16.32% above its current price ($41.06).

For the latest price and information on Macerich, please visit Finstead and ask for "MAC price" or just "MAC".

2. Sun Hung Kai Properties (SUHJY)

Sun Hung Kai Pptys (SUHJY) is my second pick.  Kwok Tak Seng founded this company based in Hong Kong.  Sun Hung Kai is considered to be the world's second most valuable real estate company. 

We can expect robust contract sales for the company this year since it has been actively maintaining its land auction market.  Sun Hung Kai has revised its project pipeline.  

The company grew 9% occurred in 2018, in contrast to 2% in 2017.  Over the last month, Sun Hung Kai Pptys L (SUHJY) returned +4.58%. 

Sun Hung Kai Pptys L (SUHJY) average analyst price target is 14.43% above its current price ($17.05).

For the latest price and information on Sun Hung Kai Pptys L, please visit Finstead and ask for "SUHJY" or "SUHJY analysis".

3. CK Asset Holdings (CHKGF)

Cheung Kong Property Holdings Ltd (CHKGF) is my third pick.  CK Asset Holdings is among the biggest property developers in the world.  It has a leading market share in Hong Kong along with an extensive portfolio in Mainland China.

Hong Kong residential sales have been projected at 30% of the company's total earnings.  CK Assets Holdings also earns money from non-real-estate activities, interests in REITs, hotels, and investment properties. 

The company has a strong balance sheet as well as good proceeds from non-core asset disposals in Hong Kong.

Over the last month, Cheung Kong Property Holdings Ltd (CHKGF) returned +4.19%. 

For the latest price and information on Cheung Kong Property Holdings Ltd, please visit Finstead and search for "CHKGF" or "CHKGF analysis".

Macerich Company (The) (MAC) Stock Guide

Updated at: 4:50 am ET, 18 Sep 2020

Before we start: if you're looking for MAC stock price, you can quickly find it out by visiting Finny and typing "MAC quote". If you're looking for a quick scoop on MAC stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "MAC". You'll get all this info in one place. Or you can just type "MAC news" to get the latest stock news.

Looking to buy or sell Macerich Company (The) (MAC)? Interested in getting the full scoop on MAC, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this MAC stock guide, we'll address key questions about MAC, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are MAC earnings?
2. What is MAC dividend?
3. What is MAC dividend yield?
4. What is MAC stock forecast (i.e., prediction)?
5. MAC buy or sell? What is MAC Finny Score?
6. What are the reasons to buy MAC? Why should I buy MAC stock?
7. What are the reasons to sell MAC? Why should I sell MAC stock?
8. What are MAC key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are MAC earnings?

MAC trailing 12-month earnings per share (EPS) is $0.38.

2. What is MAC dividend?

MAC forward dividend is $0.60.

3. What is MAC dividend yield?

MAC forward dividend yield is 7.57%.

Analyst Predictions

4. What is MAC stock forecast (i.e., prediction)?

Based on MAC analyst price targets, MAC stock forecast is $10.57 (for a year from now). That means the average analyst price target for MAC stock is $10.57. The prediction is based on 19 analyst estimates.

The low price target for MAC is $3.76, while the high price target is $53.58.

MAC analyst rating is Hold.

Analysis

5. MAC buy or sell? What is MAC Finny Score?

#{finnyScore:30}Our quantitative analysis shows 3 reasons to buy and 7 reasons to sell MAC, resulting in Finny Score of 30.

6. What are the reasons to buy MAC? Why should I buy MAC stock?

Here are the reasons to buy MAC stock:

  • Macerich has proficiently managed its portfolio over the past several years, trading out of noncore assets while reinvesting into its best assets and refining its tenant mix. Altogether, this has resulted in one of the best retail portfolios within our coverage.
  • Macerich’s high-quality portfolio remains a compelling takeover target for its REIT peers and other private investors willing to pay top dollar.
  • The company is expanding its successful upscale outlet business, which may drive increased growth and diversification going forward.
  • MAC forward dividend yield is 7.57%, higher than the industry (1.44%) and sector (1.13%) forward dividend yields. See MAC forward dividend chart.
  • MAC Price/Book ratio is 0.46, which is low compared to its industry peers’ P/B ratios. See MAC forward Price/Book ratio chart.
  • MAC average analyst price target ($10.57) is above its current price ($7.81). See MAC price target chart.

7. What are the reasons to sell MAC? Why should I sell MAC stock?

Let's look at the reasons to sell MAC stock (i.e., the bear case):

  • Shifts in consumer behavior, greater adoption of e-commerce, and other technological advances can and will significantly disrupt retailer and mall profitability.
  • Macerich may be incentivized to take increased risks in order to create ample value and win back investor confidence after rebuffing Simon’s takeover advances.
  • Macerich has a relatively high geographic concentration on the coasts and Arizona, which in our view increases risk.
  • MAC quarterly revenue growth was -30.10%, lower than the industry and sector average revenue growth (0.01% and 1.44%, respectively). See MAC revenue growth chart.
  • MAC profitability is declining. The YoY profit margin change was -34.94 percentage points. See MAC profitability chart.
  • MAC Price/Sales ratio is 1.28, which is high compared to its industry peers’ P/S ratios. See MAC forward Price/Sales ratio chart.
  • MAC short share of float is 82.53%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock. See MAC short share of float chart.
  • MAC short interest (days to cover the shorts) ratio is 16.46. The stock garners more short interest than the average industry, sector or S&P 500 stock. See MAC short interest ratio chart.
  • MAC cash to debt ratio is 0.08, lower than the average industry (0.09) and sector (0.10) cash to debt ratio. See MAC cash to debt chart.
  • MAC Enterprise Value/Revenue multiple is 7.80, which is high compared to its industry peers’ Enterprise Value/Revenue multiples. See MAC Enterprise Value/Revenue chart.

Key Stats

8. What are MAC key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for MAC:

Metrics MAC
Price $6.82
Average Price Target / Upside $10.57 / 54.99%
Average Analyst Rating Hold
Forward Dividend Yield 7.57%
Industry REIT - Retail
Sector Real Estate
Number of Employees 718
Market Cap $1.16B
Forward P/E Ratio -22.82
Price/Book Ratio 1.28
Revenue (TTM) $903.5M
YoY Quarterly Revenue Growth -30.10%
Profit Margin 6.16%

If you liked this analysis, check out Stock Guides for other stocks.

Follow Us