Buy this cheap ASX 200 share with ‘the best property balance sheet on the market’: fundie

Looking for a cheap S&P/ASX 200 Index (ASX: XJO) share with a strong balance sheet?

Then you may wish to have a look at Goodman Group (ASX: GMG), the largest real estate investment trust (REIT) in Australia.

That’s according to Marcus Bogdan, chief investment officer at Blackmore Capital.

An ASX 200 share with 11% earnings per share growth

Speaking to Livewire, Bogdan singled out Goodman as a stock he’d like in his Christmas stocking this year.

Goodman, like most REITs, has faced some stiff headwinds from fast rising interest rates. That’s seen the ASX 200 share sink 30% in 2022. And that could make it a holiday bargain.

“The stock has derated quite significantly as interest rates have risen,” Bogdan said. “It’s gone from a price-to-earnings multiple of around 30 times to around 19 times today.”

Goodman’s position as a global leader in logistics warehousing makes it “a longer-term play, particularly the higher quality ones” he said.

Bogdan added:

Very strong balance sheet, it’s the best property balance sheet on the market and it’s meeting guidance. With earnings per share growth of 11% and a PE of 19 times, it’s a buy.

At the current price, the ASX 200 share pays a 1.6% trailing dividend yield, unfranked.

How has Goodman been tracking?

In its first quarter update, released on 2 November, Goodman reaffirmed its guidance for FY 2023, despite difficult market conditions.

For the three months ending 30 September, the ASX 200 share reported a 4% increase in like-for-like net property income (NPI) growth. The 11% earnings per share guidance growth Bogdan refers to would bring EPS to 90.3 cents.

Goodman’s CEO, Greg Goodman noted:

We are in a strong position to withstand and respond to the impacts of a slowing economy in different parts of the world. This is due to the demand for our strategic locations, quality of our assets, strength of our development book, growth in cash flows, and our low leverage and strong capital position.

The ASX 200 share is down 2.5% in intraday trade today

The post Buy this cheap ASX 200 share with ‘the best property balance sheet on the market’: fundie appeared first on The Motley Fool Australia.

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More reading

• 2 high quality blue chip ASX 200 shares named as buys by analysts
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• Why Goldman Sachs rates these blue chip ASX 200 shares as buys
• 2 ASX shares that could ride out the coming volatility: experts

Motley Fool contributor Bernd Struben 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 has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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