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Stockland Corporation Ltd could fall with national property prices

Credit: umbrella

Shares in Australia’s biggest residential developer, Stockland Corporation Ltd (ASX: SGP) opened steady today at $4.05, down from $4.67 at this time last year after a share price slump over the last 3 months.

With a portfolio of branded retail centres, business parks, residential communities and office buildings across the country, broker consensus suggests Stockland will do little more than maintain the status quo in the short-term future, after logging a statutory NPAT of $684 million this month – down 2.6% on the previous corresponding period.

Stockland’s interim results announcement included a funds from operations figure of $436 million, up 18.2% on the previously reported period, with share prices trading at a slight discount to its NTA which results showed was at $4.18 per share for the period ending December 31, 2017.

Stockland’s profit slide is likely due to the slowing residential market, particularly in Sydney and Melbourne, with a move into higher-density housing in the next two years hopefully able to push share prices up and boost overall performance.

While Stockland maintains a focus on residential development, peers like Growthpoint Properties Australia Ltd (ASX: GOZ), which is priced at $3.24 today, are more heavily weighted in the commercial property sphere. However, Stockland eclipses Growthpoint in terms of market cap, sitting at $9.86 billion to Growthpoint’s $2.2 billion.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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