Alexandria Real Estate Equities is an investment trust which has a unique niche. It is heavily involved in the life-sciences industry, both owning and leasing office and laboratory space used by research companies. The firm has an impressive market cap of $24 billion, as well as more than 41 million square feet of leasable space. Furthermore, Alexandria has a presence in several major U.S. research hubs, among them New York, Boston, San Diego, and Seattle.
The company’s long-term earnings trend shows its value. Alexandria’s quarterly earnings have been rising consistently for the last two years, a trend that was enhanced by the coronavirus epidemic, which put a premium on both health and life sciences services.
Even though the stock had missed the earnings forecast in the fourth quarter, Alexandria matched it in the first quarter at $1.82 per share. Analysts expect the stock to show a 55% year-over-year earnings gain, mostly based on $253 million in revenue.
In the second quarter, the company put 6.9 million shares of common stock on the market, at a price of $160 per share. Furthermore, the company increased its dividend by 3 cents to $1.06 per share. The new dividend gives a yield of 2.5%. It also has a safe payout ratio of 49%.
What do the analysts think?
Aaron Hecht, JMP Securities analyst, stated that since the coronavirus lockdown began, there were material demand shifts across real property types as the pandemic/social unrest has changed consumer behavior. As a result, demand is increasing across real estate sectors that provide superior safety from the infection.
Hecht added that Alexandria owns a premier portfolio of Life Science properties, with tenants that work in the Technology and Biotech industries. Lots of tenants are developing COVID-19 therapeutics, and the portfolio is trophy-level quality.
Considering all this, the analyst dubbed Alexandria’s shares as a Buy. He set the price target at $185. In the case of success, shareholders will gain 10% in the coming 12 months.
Several other analysts gave the company a strong-buy rating. Shares are currently selling for $168, with the average price target of $178.75, suggesting a 7% upside.