PLD - Prologis: Slower Growth Perhaps Not Worth 3.5% Yield

2024-06-08 04:22:39 ET

Summary

• Prologis trades at a lower dividend yield compared to other REITs, given its history of growth.
• It has a strong portfolio of warehouses that support the logistics of the e-commerce industry.
• The future growth of Prologis may be hindered as higher interests rates have slowed acquisitions and inflation threatens consumer spending.
• Yet, the company adapts by improving the current properties as a new avenue for rental growth.

Many REITs currently trade, at their lowest, around a 5% dividend yields, roughly a money market's interest rate. Prologis ( PLD ), meanwhile, trades at 3.5%, and this is even after almost a 15% dip from recent highs in March.

This relative premium is worth examining. Is it paying more for dependable cash flow, perhaps valuable properties? Is there a growth story?...

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