REITs are going to prove to be a great bet in the coming months and years for two reasons. First, all of the money that the central banks printed when they tried to prop up the world economies is going to work its way into the economy. The last time that happened there was a huge move into real estate. That is likely to happen again. The other reason REITs are a great buy is that there is a tremendous amount of pent-up demand. This company is well positioned to profit from both of these aspects.
InterRent Real Estate Investment Trust is an open-ended real estate investment trust (REIT). It invests primarily in multi-resident properties and real estate ventures. The company’s market capitalization is $425 million. The stock is trading at $7.78 per share.
I have been very bullish on real estate for some time. Think of all of the money that was printed by the central banks around the world. That was inflationary and the one thing that happens during inflationary times is that asset prices increase. Real estate will be going up in price and there is already indications that home affordability is at near-record lows. This is because there has not been any real development over the past many years after the real estate bubble from 2008. Too many investors got their fingers singed from that and investment in development waned considerably. Now, the players are back in building at decent levels. But, the supply has not necessarily been able to keep up with demand.
The economies of the world are improving and expanding. This, too, indicates that asset prices will continue to move higher. As incomes increase throughout North America these individuals will want to get more established and buy into real estate. The economic indicators that are showing these signs are moving higher.
Those are only some of the reasons that the future of a REIT is a good investment. For now, IIP is a solid investment as it is. Gross incomes and earnings-per-share have been increasing over the past many years, as these listing show, respectively:
2012: $39,607 / $1.87
2013: $44,019 / $0.53
2014: $46,751 / $0.41
2015: $59,856 / $0.70
Keep in mind that the price of this stock is currently trading at $7.00 per share. That means this stock is trading at 10-times earnings. Plus, the earnings outlook is increasing. This means that an investment in this company could return to the holder a 10 percent investment. This is significant when you consider that the overall stock market is trading at 25-times earnings. Again, this is a significant discount to the average and a considerable opportunity for investors. You will not find many opportunities like this around.
But, as was mentioned previously, investors have largely stayed away from real estate investments simply because of the financial crisis of 2008; no one has wanted to get back into real estate. This is more of an opportunity for a savvy investor than anything. If the rest of the market is trading at such a high ratio than anyone with the gumption to get into a stock such as IIP will reap very strong rewards in the long run. Earnings are increasing. And, the economic outlook for real estate is expansionary. Then there is the fact that the central banks printed up so much money after the financial crisis. This will push asset prices significantly higher.
All the while, the company has been increasing investments which will translate into more revenue over the next several years:
Real estate is going to be a big play in the years to come, and this particular stock is situated very well. Plus, the earnings are strong and increasing with more investments happening within the company. Plus, the EPS ratio makes so that this stock is significantly discounted versus the rest of the stock market. An investment in real estate, and a long term hold on that investment will reap plenty of rewards over the coming years. IIP is a company that you can build your portfolio upon.
|This story from Macroaxis reported on February 8, 2017 contributed to the next trading day price increase.The trading delta at closing time to the next closing price was 0.65% . The trading delta at closing time when the story was published to the current price is 43.17% .|