If you are looking for an ASX 200 stock with income appeal and potential upside, Bell Potter believes it has found one.
In a note released this morning, the broker has picked out a stock it believes can offer 11% upside and a 5% dividend yield.
Image Source: Getty Images
Which ASX 200 stock?
The stock that is being recommended to clients by Bell Potter is Centuria Industrial REIT (ASX: CIP).
Bell Potter notes that the ASX 200 stock delivered a steady first-half result, with funds from operations slightly ahead of expectations. It said:
CIP announced its 1H26 result with FFO / share of 9.1c slightly above BPe and Visible Alpha consensus (+1%). FY26 guidance was reiterated (previously increased bottom end of range) for FFO / share range of 18.2c – 18.5c (BPe 18.4c; VA consensus 18.4c) and DPS of 16.8c (in line with BPe and VA consensus).
Importantly, the broker sees further upside from leasing activity across the portfolio. It explains:
With 4.3% vacancy on foot (improved vs. FY25), we still see scope for earnings upside solving for several single larger vacancies as well as near-term expiries (7.1% of portfolio in FY27) particularly in NSW where the $ rents / sqm have increased earnings impact.
Data centre exposure
Bell Potter also highlights the REIT's growing exposure to data centre opportunities as a positive. The broker notes:
CIP has acquired two new assets post bal date for $60.2m combined with scope for additional power capacity or pathway to near-term power, as well as having submitted a DA to develop up to a 40MW centre adjacent to its existing Clayton DC, VIC where Telstra lease surrender is expected to be net neutral to earnings but accretive to NTA post DA and power allocation.
Attractive valuation
According to the note, in response to the ASX 200 stock's half-year results, the broker has retained its buy rating with a trimmed price target of $3.60 (from $3.75). Based on its current share price of $3.24, this implies potential upside of 11% for investors.
In addition, it is forecasting a 5.2% dividend yield in FY 2026 and a 5.3% dividend yield in FY 2027.
Bell Potter believes the stock is trading at an attractive discount compared to its net tangible assets. The broker said:
CIP currently trades at a -18% discount to NTA vs. +8% average premium to book achieved on all non-core asset sales (c.$270m worth) since FY23 with elevated levels of industrial cap trans across the market, and the ability to unlock earnings upside via a small number of leasing deals.
