For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Prologis (NYSE:PLD) 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 Dec 31, 2020, Prologis owned or had investments in properties and development projects aggregating around 984 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 (NYSE:BX) 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
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Prologis ten years ago, you're likely feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in April 2011 would be worth $3,123.50, or a 212.35% gain, as of April 12, 2021. Investors should keep in mind that this return excludes dividends but includes price appreciation.
The S&P 500 rose 210.86% and the price of gold increased 15.30% over the same time frame in comparison.
Analysts are anticipating more upside for PLD.
Shares of Prologis outperformed the industry over the past year. In February, the company announced completion of $2 billion of financing activity, with deploying of proceeds for redemption of senior notes. Issuances and related redemptions helped in reducing its weighted average interest rate and extend its weighted average remaining term. It also hiked its quarterly dividend. 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 is likely to fuel competition and curb pricing power. Stabilization of e-commerce sales growth and more modest demand are concerns for rent hikes.
The stock has jumped 9.99% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 3 higher, for fiscal 2021; the consensus estimate has moved up as well.
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Prologis, Inc. (PLD): Free Stock Analysis Report
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