“When you throw in the company’s head-spinning 8% dividend yield, it’s easy to see why Blackstone is a top choice for growth and income.”
It’s been one of the hottest trades on the Street in the last year. It effects million and millions of people, far more than stocks and bonds together, and it’s giving jobs, the economy and sentiment a huge boost.
I’m talking about housing. Make no mistake about it, 2012 was a huge rebound year for the housing market. After 6 long years of falling prices, the housing market finally found the strength to rebound in 2012, climbing higher in every month of the year. The big reversal in housing is expected to continue into 2013, with inventories at multi-year lows and analysts projecting another 5%-7% gain.
That will have a profound effect on the economy and the entire stock market, but there is one stock in particular that stands out from the crowd. The Blackstone Group (NYSE: BX) is a private-equity firm that is making huge investments to capitalize on the rebound in housing. In fact, after investing more than $2.5 billion on 16,000 private rental properties, Blackstone is the largest private real-estate owner in the country.
Blackstone’s leverage against a housing rebound has lifted its share price to a 40% gain in the last 6 months. But in spite of that market beating performance, this stock still looks undervalued. Blackstone is projected to earn $2.20 in 2013, which has shares trading with a forward P/E of just 9 times, a steep discount to the S&P 500’s 14 times and the company’s 5-year average of 12 times. Further out, analysts are looking for earnings growth of 20% in 2014. And when you throw in the company’s head-spinning 8% dividend yield, it’s easy to see why Blackstone is a top choice for growth and income.
So be sure to keep your eye on housing in 2013. If the trend higher continues, it will be a big-time catalyst for the economy, stocks, jobs and particularly Blackstone Group.
Your Investment Partner,