Rising interest rates, coupled with supply and demand issues, are causing the U.S. housing market to turn on its ear.
But one sector of real estate continues to boom: industrial.
Companies are on the lookout for warehouses and big-box assembly spaces for products.
This chart shows the square footage of industrial property occupied minus the available square footage.
When the number is higher, it means more property is occupied than is vacant.
This tightens the property market. With property at a premium, building owners are in the driver’s seat when it comes to leasing space.
Another indicator is that the vacancy rate of industrial property fell to its lowest level in more than a year in the fourth quarter of 2021.
The Power Stock that will surge thanks to this trend is Indus Realty Trust Inc. (Nasdaq: INDT).
Indus is a real estate investment trust (REIT) that develops, manages and leases industrial and warehouse property.
The company owns 35 buildings totaling 5.2 million square feet in Connecticut, Pennsylvania, North Carolina, South Carolina and Florida.
INDT scores a “Strong Bullish” 91 out of 100 on our Stock Power Ratings system, and we expect it to beat the broader market by 3X in the next 12 months.
INDT Stock: Outstanding Technical Scores
Researching INDT, two items stood out to me:
- In 2021, the company posted rental revenue of $42.3 million — a 12.5% increase over the $37.5 million reported the year before.
- In the fourth quarter of 2021, Indus posted a net income of $19.6 million, compared to a loss of $8.8 million in the fourth quarter of 2020.
Indus stock’s technical scores (momentum, size and volatility) are terrific!
Its 93 rating on volatility puts it in the top 7% of all stocks we rate and tells us the share price doesn’t bounce around much. (The higher the volatility rating, the less volatile the stock is.)
INDT’s one-year annual earnings-per-share (EPS) growth rate is an impressive 172.3%. Even better, its quarter-over-quarter EPS growth rate is 199%!
INDT shows solid momentum, scoring 86 on that metric.
The stock ran up 30% from October 2021 to January 2022. Although market conditions have pushed all stocks down, INDT is still 11.2% up from a year ago.
Take a look:
The stock jumped 30% from October 2021 to January 2022, when it hit its 52-week high of $82.08.
Those gains have pared back since then, but the company’s strong performance tells me this is a buying opportunity.
For the last 12 months, INDT is up 11.2%, while the financial industry is down 5.7%.
Indus stock scores a 91 overall on our proprietary Stock Power Ratings system.
That means we’re “Strong Bullish” and expect it to beat the broader market by at least three times in the next 12 months.
REITs are a smart way to invest in real estate without buying property.
Bonus: REITs pay out profits as dividends. INDT’s dividend yield is 0.89%, meaning it pays shareholders $0.64 per share just to own the stock.
Stay Tuned: Toymaker’s Future Is Bright
Remember: We publish Stock Power Daily five days a week to give you access to the top companies that our proprietary Stock Power Ratings identify.
Stay tuned for the next issue, where I’ll share all the details on one longtime personalized toymaker!
Matt Clark, CMSA®
Research Analyst, Money & Markets