In light of major real estate company China Evergrande Group (HKSE:03333, Financial) warning of possible defaults on its debt, four U.S. real estate stocks with strong business quality metrics include CBRE Group Inc. (CBRE, Financial), PS Business Parks Inc. (PSB, Financial), PotlachDeltic Corp. (PCH, Financial) and Marcus & Millichap Inc. (MMI, Financial) according to the All-in-One Screener, a Premium feature of GuruFocus.
U.S. and Hong Kong stock markets start new week with a bust as China Evergrande warns of default
On Monday, the Dow Jones Industrial Average closed at 33,970.47, down 614.41 points or approximately 1.78% from last Friday’s close of 34,584.88.
The broad U.S. market indexes tumbled as investors monitored news regarding China Evergrande, a Shenzhen, Guangdong-based real estate giant that also operates in the insurance, banking, tourism and health care sectors. Shares tumbled more than 10% on the back of the company announcing last week that property sales may continue to decline during the rest in September, further weakening its cash position. The company also reiterated that it can default on its debt.
GuruFocus ranks China Evergrande’s financial strength 3 out of 10 on several warning signs, which include a weak Altman Z-score of 0.58 and debt ratios that underperform more than 70% of global competitors.
The Hang Seng Index closed at 24,099.14, down 821.62 points or 3.3% from the previous close of 24,920.76. Markets in mainland China, Japan and South Korea were closed due to the Mid-Autumn Festival holidays.
Investors can find opportunties in US real estate stocks with good business quality
As people continue monitoring the situation regarding China Evergrande, investors can find opportunties in U.S. real estate stocks with good business quality. According to the All-in-One Screener, a Premium feature of GuruFocus, four U.S. real estate stocks have high financial strength and 10 years of profitability over the past decade.
CBRE Group (CBRE, Financial) provides a wide range of real estate services to owners, occupants and investors worldwide. GuruFocus ranks the Los Angeles-based company’s profitability 8 out of 10 on several positive investing signs, which include a four-star business predictability rank and a return on equity that outperforms more than 83% of global competitors.
Gurus with large holdings in CBRE include Baillie Gifford (Trades, Portfolio), ValueAct Holdings LP (Trades, Portfolio) and Al Gore (Trades, Portfolio)’s Generation Investment Management.
PS Business Parks
PS Business Parks (PSB, Financial) owns and operates multitenant commercial warehouse, office and industrial properties in the U.S. GuruFocus ranks the Glendale, California-based real estate investment trust’s financial strength 9 out of 10 on several positive investing signs, which include a strong Altman Z-score of 29 and interest coverage and equity-to-asset ratios that are outperforming more than 93% of global competitors.
PotlachDeltic (PCH, Financial) owns and operates forestland in several U.S. states. GuruFocus ranks the Spokane, Washington-based REIT’s financial strength 6 out of 10 on several positive investing signs, which include a high Piotroski F-score of 8, a strong Altman Z-score of 3.5 and interest coverage and debt ratios that outperform more than 80% of global competitors.
Marcus & Millichap
Marcus & Millichap (MMI, Financial) engages in commercial real estate investment sales, financing, research and advisory services. GuruFocus ranks the Calabasas, California-based company’s financial strength 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7, a strong Altman Z-score of 6.9 and interest coverage and debt ratios that outperform more than 84% of global competitors.
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