Critical Review: Prologis (PLD) and Its Peers

Prologis (NYSE: PLD) is one of 13 public companies in the “Industrial REITs” industry, but how does it contrast to its peers? We will compare Prologis to related companies based on the strength of its risk, earnings, institutional ownership, dividends, valuation, analyst recommendations and profitability.

Profitability

This table compares Prologis and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Prologis 68.50% 9.93% 5.99%
Prologis Competitors 43.13% 5.64% 2.90%

Volatility and Risk

Prologis has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500. Comparatively, Prologis’ peers have a beta of 1.07, meaning that their average share price is 7% more volatile than the S&P 500.

Valuation and Earnings

This table compares Prologis and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Prologis $2.53 billion $1.21 billion 20.14
Prologis Competitors $606.71 million $215.55 million 1,096.50

Prologis has higher revenue and earnings than its peers. Prologis is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Institutional & Insider Ownership

95.5% of Prologis shares are held by institutional investors. Comparatively, 91.8% of shares of all “Industrial REITs” companies are held by institutional investors. 1.3% of Prologis shares are held by insiders. Comparatively, 1.8% of shares of all “Industrial REITs” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Prologis pays an annual dividend of $1.76 per share and has a dividend yield of 2.6%. Prologis pays out 52.9% of its earnings in the form of a dividend. As a group, “Industrial REITs” companies pay a dividend yield of 2.8% and pay out 106.6% of their earnings in the form of a dividend. Prologis has raised its dividend for 3 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Prologis and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Prologis 0 3 10 0 2.77
Prologis Competitors 56 502 494 5 2.42

Prologis currently has a consensus target price of $65.08, suggesting a potential downside of 2.97%. As a group, “Industrial REITs” companies have a potential downside of 1.78%. Given Prologis’ peers higher possible upside, analysts clearly believe Prologis has less favorable growth aspects than its peers.

Summary

Prologis beats its peers on 9 of the 15 factors compared.

About Prologis

Prologis, Inc. is a real estate investment trust (REIT) company. The Company is engaged in logistics real estate business. The Company’s segments include Real Estate Operations and Strategic Capital. The Real estate operations segment consists of rental operations and development. The Company’s strategic capital segment includes asset management services, as well as services performed for unconsolidated co-investment ventures. Its strategic capital segment gives the Company access to third-party capital, both private and public. As of December 31, 2016, the Company owned or had investments in, on an owned basis or through co-investment ventures, properties and development projects across 676 million square feet (63 million square meters) in 20 countries spanning four continents.

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