Goodman (ASX:GMG) share price trading higher after quarterly results

The Goodman share price is trading higher today after it released its quarterly report. We take a closer look.

| More on:

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Goodman Group (ASX: GMG) share price is rising today as the company announced an operational update for the first quarter of FY21. Goodman's share price is currently up 2.91% to a price of $19.48.

What Goodman does

Goodman Group is a REIT (real estate investment trust) with operations throughout Australia, New Zealand, Asia, Europe, the United Kingdom, North America and Brazil.

As such the group owns, develops and manages real estate properties. This includes warehouses, large scale logistics facilities, business and office parks globally.

The group was formed following the merger of Macquarie Goodman Industrial Trust and Macquarie Goodman Management in 2005. Goodman operates four divisions: property investment, fund management, property services and property development.

Quarterly update

The company was able to deliver a strong first quarter despite the implications of COVID-19

For the quarter, Goodman reported that it had $51.7 billion total assets under management. The company spoke of the limited supply in markets and how growing demand is reflected in stable occupancy at 97.8%. It also helped drive an increase in net property income of 2.9%.

In terms of development, Goodman reports the strong demand from customers has continued into this quarter, giving the group confidence to further increase its development activity. As such, the company's work in progress metric has risen to $7.3 billion and is expected to increase further throughout the year. Yield on cost has remained stable at 6.7%.

What now for the Goodman share price?

While the pandemic continues to disrupt markets, Goodman has been one of the few REITs to overcome the challenge. Therefore, while the Australian S&P/ASX 200 Real Estate (ASX: XRE) sector has fallen 17% for the year. In contrast, the Goodman share price has gained 36%, outpacing its sector by a huge 53%.

To this end the company has reaffirmed its earnings guidance for the year ahead. Its guidance for FY21 is 62.7 cps, up 9% on the prior year, and a full year distribution of 30cps.

Goodman also notes that it retains a significant cash balance, liquidity and a strong balance sheet. The company continues to retain profits to fund its share of future capital commitments.

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

An excited man stretches his arms out above his head as he reaches a mountain peak.
Record Highs

Breaking: CBA shares hit a new record of $180

CBA shares can't possibly keep rising can they?

Read more »

A happy young couple celebrate a win by jumping high above their new sofa.
52-Week Highs

Guess which ASX 200 furniture retailer is up 400% in 5 years?

Up 400% over the past five years is not bad for a furniture retailer. Here's why this quiet compounder has…

Read more »

Arrows pointing upwards with a man pointing his finger at one.
Share Market News

Morgans says these ASX stocks can rise 30% to 80%

These shares could be cheap according to the broker. Let's see what it is saying.

Read more »

Two people shaking hands in the boardroom on a merger.
Mergers & Acquisitions

What did Macquarie make of the Brickworks and Soul Patts merger?

Macquarie sees simplification, scale, and upside… but it also has a warning..

Read more »

A cool young man walking in a laneway holding a takeaway coffee in one hand and his phone in the other reacts with surprise as he reads the latest news on his mobile phone
Mergers & Acquisitions

PointsBet share price surges 11% on improved takeover offer

The bidding war for PointsBet shares continues apace today.

Read more »

A man has a surprised and relieved expression on his face. as he raises his hands up to his face in response to the high fluctuations in the Galileo share price today
Broker Notes

Leading broker tips 50%+ upside for IDP Education shares

The team at Macquarie thinks this beaten down stock could be a buy.

Read more »

Man looking happy and excited as he looks at his mobile phone.
Share Gainers

Why Coronado, DroneShield, Lovisa, and Mayne Pharma shares are racing higher today

These shares are having a good time on hump day. But why?

Read more »

Man pointing at a blue rising share price graph.
Share Gainers

Guess which ASX 300 stock just rocketed 43% on big news!

Investors are piling into this ASX 300 stock on Wednesday. But why?

Read more »