Alexander & Baldwin: A Venerable Hawaiian Landlord With A Rich Valuation

Summary

  • ALEX was once a Big Five Hawaiian conglomerate with lots of irons in the fire, from sugarcane farms to agricultural & conservation land ownership to commercial real estate.
  • Since converting to a REIT in 2017, ALEX has increasingly focused on income-generating real estate, especially grocery-anchored retail centers and industrial properties.
  • The simplification process is almost complete, with ALEX's residential development interest now sold and the sale of its paving business on the horizon.
  • I like ALEX and would like to own more of it, but the valuation looks too high based on my assumptions about post-simplification growth.
  • Looking for a helping hand in the market? Members of High Yield Landlord get exclusive ideas and guidance to navigate any climate. Learn More »
Diamond Head State Park Aerial

Art Wager/E+ via Getty Images

Thesis: Post-Simplification Growth Rate Is Cloudy

Alexander & Baldwin (NYSE:ALEX) is a longstanding institution on the island state of Hawaii. It has operated commercially in territorial Hawaii for 151 years, starting as a sugarcane farming operation, going on to become the largest landowner

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This article was written by

20.43K Followers

Austin Rogers is a REIT specialist with a professional background in commercial real estate. He writes about high-quality dividend growth stocks with the goal of generating the safest growing passive income stream possible. Since his ideal holding period is "lifelong," his focus is on portfolio income growth rather than total returns.

Austin is a contributing author for the investing group High Yield Landlord, one of the largest real estate investment communities on Seeking Alpha, with thousands of members. It offers exclusive research on the global REIT sector, multiple real money portfolios, an active chat room, and direct access to the analysts. Learn more.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of ALEX either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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