Every so often, an opportunity emerges that seems almost too good to be true. Sometimes this occurs because of a new segment in the market, such as we saw earlier this year with the tidal wave of investments that came with legalization. Other times, that opportunity comes in the form of a turnaround that could be due to improving market conditions or commodity prices.
Then there’s Brookfield Property Partners LP (TSX:BPY.UN)(NASDAQ:BPY) and the opportunity it currently presents to investors.
Meet Brookfield Property Partners If you haven’t heard of this particular Brookfield before (and there are several of them) you will definitely remember it after this. The company has a diversified portfolio of real estate investments ranging from multi-family residential and retail units to office and industrial uses along with and self-storage properties.
Worth noting is that many of those properties have tenants that are representative of the market leaders across the finance and retail segments of the economy, as well as with governments worldwide. This translates into an incredibly stable and secure source of recurring revenue for the company, with an average lease expiration coming in just short of two decades.
In terms of results, Brookfield Property announced results for the third fiscal back in November, which shows significant growth prospects. Net income for the period came in at US$722 million, surpassing the US$659 million reported in the same period last year. Company FFO also saw a hike in the most recent period, coming in US$13 million higher than the same quarter last year, to US$249 million. Overall, the 3% gain was largely attributed to increased leasing activity in both the New York and Washington D.C. markets.
Occupancy across the company’s assets remained at a respectable 92.9%, thereby beating the 92.7% witnessed in the same quarter last year.
In terms of stock price, Brookfield is trading just shy of $21, with a P/E of 10.56, down an incredible 25% year-to-date and approaching near 30% down over the course of the past two years, which is an incredible discount given the value and long-term potential of Brookfield’s global portfolio.
Even better is the fact that at its current rate, Brookfield is trading far below its NAV and still offers a mouth-watering quarterly dividend with a yield of 7.60%.
Should you buy Brookfield? Brookfield Property Partners is an incredible long-term investment option that’s trading at an almost unbelievable discount at the moment. If the stock price were to converge (as it should) closer to its NAV, investors could witness double-digit growth of 50% or higher, and that’s not even taking into consideration the bevy of properties that the company already manages that are profitable and growing.
Adding to this the incredible dividend on offer, and you have the complete package to add to your portfolio just in time for the holidays.
Fool contributor Demetris Afxentiou has no position in any of the stocks mentioned. Brookfield Property Partners is a recommendation of Stock Advisor Canada.