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Here's How Much You'd Have If You Invested $1000 in Prologis a Decade Ago

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  • PLD

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.

Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.

What if you'd invested in Prologis (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 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.

A $1000 investment made in August 2011 would be worth $4,594.16, or a 359.42% gain, as of August 17, 2021, according to our calculations. Investors should note that this return excludes dividends but includes price increases.

Compare this to the S&P 500's rally of 275.58% and gold's return of -4.13% over the same time frame.

Going forward, analysts are expecting more upside for PLD.

Prologis’ better-than-expected second-quarter 2021 core funds from operations (FFO) per share reflects all-time low vacancies in its markets that aided rent growth and valuation increases. The industrial REIT also raised the 2021 outlook for core FFO per share and cash same-store NOI growth on robust demand. 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. Its shares have outperformed the industry over the past three months. 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.

Over the past four weeks, shares have rallied 5.45%, and there have been 8 higher earnings estimate revisions in the past two months for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.
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