The Outlook for Industrial REITs
Industrial REITs are expected to pick up steam as the US economic outlook gradually improves—demand for industrial properties is tied to overall economic growth.
If inflationary pressures cause interest rates to rise, this can sometimes work in favor of owners of warehouses or self-storage facilities. The Federal Reserve raised the interest rates with expectations of stable long-term inflation.
Industrial properties suffered a major setback during the 2008 financial crisis. The vacancy rate for industrial properties increased, and the need for new industrial buildings was close to zero.
The performance of industrial REITs in the past week was on the positive side. Industrial REITs combine assets such as a warehouse, cold storage, research and development sites, and general-purpose flex offices.
In this article, we’ll compare Dycom Industries with its peers. The PE ratios of Dycom, Quanta Services, and Emcor are 35.7x, 23.0x, 19.1x, respectively.
Dycom reported a loss on debt extinguishment of $16.3 million in 1Q16. Its respective net income and earnings per share rose to $30.8 million and $0.91 in 1Q16.
The price-to-earnings ratios of MAXIMUS, Accenture, Xerox, Broadridge Financial, and ExlService Holdings are 22.7x, 21.9x, 28.1x, 24.0x, and 33.8x.
MAXIMUS reported revenue of $578.7 million in fiscal 4Q15, a rise of 32.9% when compared to the revenue of $435.4 million in fiscal 4Q14.
The Huntington EcoLogical Strategy ETF invests 1.9% of its holdings in Middleby. The ETF is actively managed, and is made of ecologically-focused companies.
The PowerShares DWA Consumer Cyclicals Momentum ETF invests 2.0% of its holdings in Middleby. The ETF tracks an index of US consumer cyclical firms.
The price-to-book value ratios of Albemarle, FMC, Chemtura, and The Chemours Company are 1.9x, 2.6x, 2.2x, and 3.7x, respectively.
Albemarle has a market capitalization of $6.1 billion. After its 3Q15 earnings report, it fell by 0.82% to close at $54.22 per share as of November 4, 2015.
The price-to-earnings ratios of Atmos Energy, Xcel Energy, CenterPoint Energy, ONEOK, and NiSource are 20.4x, 20.0x, 15.3x, 23.8x, and 14.7x, respectively.
Atmos Energy reported a 4Q15 gross profit of $354.3 million, a 4.9% rise when compared to its gross profit of $337.7 million in 4Q14.
The price-to-book value ratios of Westar, Xcel, Ameren, Great Plains, and Alliant are 1.5x, 1.8x, 1.6x, 1.2x, and 1.9x, respectively.
After its earnings report, Westar Energy fell by 0.43% to close at $39.51 per share as of November 3, 2015.
The Robo Global Robotics and Automation ETF (ROBO) invests 1.7% of its holdings in Cognex.
After the 3Q15 earnings report, Cognex rose by 1.1% to close at $38.00 per share on November 2, 2015.
The price-to-book value ratios of MDU Resources, Vulcan Materials Company, Questar, NorthWestern, and Black Hills are 1.5x, 3.0x, 2.8x, 1.7x, and 1.6x.
After its 3Q15 earnings report, MDU Resources rose by 1.8% to close at $19.20 per share as of November 2, 2015.