Stock of the Day

December 17, 2020

Alexandria Real Estate Equities (ARE)

$73.66
+$1.77 (+2.5%)
Market Cap: $12.74B

About Alexandria Real Estate Equities

Alexandria Real Estate Equities, Inc. (NYSE: ARE), an S&P 500 company, is a best-in-class, mission-driven life science REIT making a positive and lasting impact on the world. As the pioneer of the life science real estate niche since our founding in 1994, Alexandria is the preeminent and longest-tenured owner, operator, and developer of collaborative life science, agtech, and advanced technology mega campuses in AAA innovation cluster locations, including Greater Boston, the San Francisco Bay Area, New York City, San Diego, Seattle, Maryland, and Research Triangle. Alexandria has a total market capitalization of $33.1 billion and an asset base in North America of 73.5 million SF as of December 31, 2023, which includes 42.0 million RSF of operating properties, 5.5 million RSF of Class A/A+ properties undergoing construction and one near-term project expected to commence construction in the next two years, 2.1 million RSF of priority anticipated development and redevelopment projects, and 23.9 million SF of future development projects. Alexandria has a longstanding and proven track record of developing Class A/A+ properties clustered in life science, agtech, and advanced technology mega campuses that provide our innovative tenants with highly dynamic and collaborative environments that enhance their ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity, and success. Alexandria also provides strategic capital to transformative life science, agrifoodtech, climate innovation, and technology companies through our venture capital platform. We believe our unique business model and diligent underwriting ensure a high-quality and diverse tenant base that results in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value.

Alexandria Real Estate Equities Bull Case

Here are some ways that investors could benefit from investing in Alexandria Real Estate Equities, Inc.:

  • The current stock price is around $74, which may present a buying opportunity for investors looking for value in the real estate sector.
  • Alexandria Real Estate Equities, Inc. has a strong market capitalization of approximately $12.88 billion, indicating a solid position in the market.
  • The company recently reported earnings that exceeded expectations, showcasing its ability to generate revenue and manage costs effectively.
  • With a dividend yield of about 7.09%, investors can benefit from regular income, which is attractive in a low-interest-rate environment.
  • Analysts have a consensus rating of "Hold," suggesting that while there may not be immediate growth, the stock is stable and could be a safe investment.

Alexandria Real Estate Equities Bear Case

Investors should be bearish about investing in Alexandria Real Estate Equities, Inc. for these reasons:

  • The company has a high payout ratio of 694.74%, which may indicate that it is returning a significant portion of its earnings as dividends, potentially limiting reinvestment in growth.
  • Recent revenue showed a decline of 1.4% year-over-year, which could signal challenges in maintaining growth in a competitive market.
  • The stock has experienced significant volatility, with a beta of 1.27, suggesting that it may be more sensitive to market fluctuations compared to other stocks.
  • With a price-to-earnings (P/E) ratio of 41.36, the stock may be considered overvalued, which could deter value-focused investors.
  • The current ratios are low, indicating potential liquidity issues, which could affect the company's ability to meet short-term obligations.

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