The housing market in the United States remained robust in July, with previously owned house sales increasing quicker than the previous month as high prices motivated owners to list more properties. According to the National Association of Realtors, sales went up…
2% in July versus the prior month. In addition, sales increased 1.5% in July compared to the same period last year.
A low-interest-rate environment and the desire to relocate to bigger and better locations have fostered high demand in the real estate sector over the past year. The global real estate market is expected to reach $3717.03 billion by 2025, growing at an 8% CAGR.
Investors’ interest in growth stocks is evident in the S&P SPDR 500 Growth ETF’s (SPYG) 21.5% return so far this year. Hence, as investors remain focused on growth stocks that can offer substantial returns this year and beyond, major real estate players CBRE Group Inc. (CBRE – Get Rating) and Jones Lang LaSalle Incorporated (JLL – Get Rating), with solid growth potential, could be wise bets now.
CBRE Group Inc. (CBRE – Get Rating)
CBRE is a global provider of commercial real estate services and investments that is based in Los Angeles. Advisory Services; Global Workplace Solutions; and Real Estate Investments are the company’s three operational segments. In addition, it develops residential-led and mixed-use sites in London under the Telford Homes brand.
Last month, Duke Realty Corporation, the largest domestic-only logistics REIT, and CBRE formed a joint venture. CBRE Global Investors will hold 80% of the venture, while Duke Realty will control 20%. The venture intends to finance assets with secured debt at a 50-60% loan-to-value ratio.
Also, last month, CBRE agreed to acquire a 60% ownership stake in Turner and Townsend Holdings Limited, a United Kingdom-based global leader in program, project, and cost management. Through this acquisition , CBRE seeks to expand its growth opportunities in project management.
For the second quarter ended June 30, 2021, CBRE’s revenue increased 20% from its year-ago value to $6.46 billion. The company’s operating income increased 289.2% year-over-year to $366.48 million over this period. Its net income increased 440.5% year-over-year to $442.64 million, while its EPS grew 441.7% from the prior-year quarter to $1.30. Its revenue increased at a 14.9% CAGR over the past five years, and its levered free cash flow increased at an 84.8% annualized rate over the past three years.
The company’s EPS is expected to grow 46.8% year-over-year to $4.8 in the current year. In addition, analysts expect CBRE’s revenue to increase 11.8% in its fiscal year 2021. CBRE’s stock has gained 97.6% over the past year and 48.1% year-to-date.
CBRE’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to…
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