This ASX All Ords share is bucking the sell-off to near all-time highs

One real estate player is outstripping the bunch.

| More on:
Rising real estate share price with a yellow arrow.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • HPI shares continue to rally in 2022 and are now up 3% in that time 
  • The group reported a robust set of results last month that market pundits have reacted well to 
  • In the last 12 months, the HPI share price has climbed more than 30% 

The All Ordinaries Index (ASX: XAO) is tracked lower today and now sits less than 1% in the red at 7,356 points at market close. After clawing back gains over the previous week, the All Ords is still down more than 2% for the month.

But one All Ords share is overtaking the pack in 2022 and is currently well on the way to nudging past its record highs.

Shares in Hotel Property Investments Ltd (ASX: HPI) are surging higher in 2022 and are now sitting almost 3% in the green since trading restarted on January 4.

Why is the HPI share price soaring higher?

The company posted a robust set of interim results last month that saw funds from operations (FFO) printed at $19.5 million for the period ending 31 December 2021.

This meant the group affirmed its FY22 distribution per share (DPS) guidance of 20.5 cents per share, signifying a 6% gain year on year.

Net tangible assets (NTA) also climbed by 16% to $3.82 following an active half for the company after it raised capital to finance transactions for two pubs.

The $36 million raised plus an additional $69 million injected into the portfolio via capital expenditures was surely a sign of this activity.

HPI also offloaded two property assets for approximately $30 million which equated to an 'exit yield' of roughly 5%, which was reinvested into other sections of the portfolio.

Not only that, but the S&P/ASX 200 Real Estate Index (ASX: XRE) is one of the best performing sectors this past week, having climbed 3%, after faltering hard in January.

The upside has analysts at JP Morgan noticing the stock, particularly after the group's most recent earnings results.

The broker is overweight on HPI shares and values the company at $4 per share in a recent note to clients. It reckons the group's enormous portfolio and income stream are attractive points in the debate.

"HPI owns a ~$1.2bn portfolio of 56 properties located predominantly in QLD. HPI has a~11-year WALE with minimal near-term expiry risk", the firm said.

"We like HPI for its defensive income stream and long WALE and believe its book cap rate is too high given the security of its income and high fixed growth (lower of 4% pa or 2x CPI)".

According to Bloomberg, 60% of brokers have HPI as a buy right now, whereas just 1 broker each have it as a hold and sell.

HPI share price snapshot

In the last 12 months this All Ords share has climbed more than 30% and has continued another 3% gain this year to date.

Over the past month, shares have climbed 8% and HPI is now in the green across all major timeframes.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Hotel Property Investments Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Real Estate Shares

senior couple disappointed and sad at their financial situation
Share Fallers

Down 26% in 5 days, why is this ASX 200 real estate stock crashing again today?

Investors are displeased with the latest announcement from the ASX 200 real estate stock.

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Real Estate Shares

Why this ASX 200 real estate share is plunging 17% today

The ASX 200 real estate share is taking a beating on Monday. But why?

Read more »

Three smiling corporate people examine a model of a new building complex.
Real Estate Shares

Bell Potter names the best ASX real estate shares to buy in FY25

There could be 'significant value' on offer in the sector right now.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Real Estate Shares

ASX 200 stock rallies as monopoly remains intact

This company is turning out to hold a monopoly that's too hard for government to crack.

Read more »

Real estate agent and client exploring property.
Real Estate Shares

Are ASX real estate shares building towards a better FY25?

Here’s the outlook for the ASX real estate sector.

Read more »

Three smiling corporate people examine a model of a new building complex.
Real Estate Shares

3 ASX 300 real estate shares with attractive dividend yields

It's dividend day for these three property players.

Read more »

Woman with a moving box on her head.
Opinions

1 ASX small-cap stock that could benefit from the rental crisis

Noticed the rental market shortage? This may be an opportunity for this ASX small-cap share.

Read more »

An industrial warehouse manager sits at a desk in a warehouse looking at his computer while the Centuria Industrial share price rises
Real Estate Shares

Guess which ASX 200 co-founder just sold $33 million worth of company shares

A major sale has just occurred at one of the ASX’s market darlings.

Read more »