Investors looking for a somewhat contrarian play may like this idea. Duke Realty Corp. (NYSE: DRE) owns and operates approximately 156 million rentable square feet of industrial assets in 20 major logistics markets.
The company recently increased its full-year guidance for 2020 development starts to a range of $775 million to $850 million from the previous range of $650 million to $800 million. Among recent developments, the company said it executed two leases in speculative development projects and started seven development projects since the end of the third quarter worth $405 million.
Duke Realty said its total development starts for 2020 are at 5.8 million square feet, with a projected $780 million in total project costs and an initial pre-leasing level of 64%.
The company is structured as a real estate investment trust and pays a 2.66% distribution. BofA Securities has set a $49 price target. The $44.57 consensus target is lower but compares with Monday’s final print of $38.34 for Duke Realty stock.
This stock has made a nice run off the lows but may hold solid upside for aggressive investors. NRG Energy Inc. (NYSE: NRG) is an integrated independent power producer that owns and operates 27 gigawatts (GW) of conventional and renewable generating capacity in the United States and serves 3 million retail customers in Texas and the Northeast.
NRG derives revenue from the sale of electricity in the wholesale and retail markets and the sale of capacity. The company also owns a 64.5% interest in NRG Yield, a publicly traded, dividend growth-oriented company that owns 5 GW of long-term contracted renewable assets.
Last Summer, NRG bought Centrica’s North American energy business in a $3.6 billion deal that nearly doubled the number of homes and businesses NRG serves across the United States and Canada. The all-cash deal to buy Direct Energy gave NRG 3 million more retail customers and is expected to generate about $740 million in annual adjusted earnings before interest, taxes, depreciation and amortization.
Investors receive a 3.02% dividend. The BofA Securities price target is $40. The posted consensus target is higher at $45.11, and NRG Energy stock closed Monday’s trading at $33.31 per share.
These five stocks replace AES Corp. (NYSE: AES), Lam Research Corp. (NASDAQ: LRCX) and SBA Communications Corp. (NASDAQ: SBAC), which were removed from the US 1 list, but each is still rated Buy.
Given the huge market move higher over the last year it may be wise to buy partial positions and see if we don’t indeed see a test of the 200-day moving average, or at least a sizable pullback, over the next month or so, especially with fourth-quarter earnings ready to start rolling in this week. That noted, all these stocks are great additions to long-term growth portfolios.