With warm weather and no income taxes, Florida has been an attractive destination lately. In fact, the Sunshine State is so attractive that it just hit a historic milestone.
According to data from the Census Bureau, Florida’s population grew by 1.9% to 22.2 million from 2021 to 2022. This makes it the fastest growing state in the country.
“The fact that the third most populous state is also the fastest growing is remarkable because it requires significant population gains,” the bureau said in a statement.
It’s a good look for Florida Governor Ron DeSantis.
“People vote with their feet,” said DeSantis spokesman Jeremy Redfern. We are proud to be a role model for the nation and an island of sanity in a sea of madness.
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Granted, Florida has been in the growth phase for quite some time now. Its current population is more than nine times its 1946 population of 2,440,000. But it’s the first time since 1957 that Florida has taken the top spot in the nation’s population growth.
And since people need a place to live, this migration trend could represent an opportunity for savvy investors.
Here’s a look at three real estate stocks with notable exposure to Florida.
St. Jo
Based in Panama City Beach, Florida, St. Joe (NYSE: JOE) is a real estate development, asset management and operating company. It has significant real estate assets and operations in Northwest Florida.
The company plans to use its existing assets for residential, hotel and commercial projects. At the same time, it has extensive land use rights for residential and commercial purposes.
That being said, 2022 has not been an easy year for real estate stocks and St. Joe couldn’t escape the sell-off. Shares of the company have fallen 24% in the past 12 months.
Business, however, remained on track.
St. Joe generated $190.7 million in revenue in the first nine months of 2022, representing a 14% year-over-year increase. Net income was $42.8 million for the first nine months, up slightly from the $42.6 million earned in the year-ago period.
St. Joe pays quarterly dividends of 10 cents per share, which translates to an annual return of just over 1%.
Lennar
Lennar began as a home builder in Miami in 1954. Over the decades, the company has expanded its presence significantly. It went public in 1971 and now commands a market capitalization of over $25 billion.
Lennar’s 2022 fiscal year ended in November. 30 it has therefore already published annual results. For the fiscal year, the company delivered 66,399 homes, up 11% from fiscal 2021.
Notably, Lennar has delivered 21,214 homes in its Eastern Division, which includes Alabama, Florida, New Jersey, Pennsylvania and South Carolina. East was the largest contributor to the company’s deliveries in fiscal 2022.
Finances have also improved. Total revenue rose 24% year-over-year to $33.7 billion for the fiscal year, and net income rose 4% to $4.6 billion.
In fact, Lennar’s net profit, shipments and revenue for 2022 were the highest in its history.
Last month, KeyBanc analyst Kenneth Zener reiterated an “overweight” rating on Lennar’s rise as the price target is $110, implying a potential 20% upside from the current levels.
communities of the sun
Florida’s warm weather is also appealing to people who want to live in mobile home parks.
And since manufactured homes are among the most affordable unsubsidized housing options in America, this segment could be attractive to investors given the bleak economic outlook.
With that in mind, check out Sun Communities (NYSE:SUI), a real estate investment trust that owns and operates manufactured housing communities, RV resorts and marinas.
As of Sept. 30, Sun Communities’ portfolio consisted of more than 180,500 developed sites and more than 46,100 wet locations and dry storage spaces in 39 states in the United States, Canada, United Kingdom and Porto Rico.
The company’s largest exposure is Florida, where it has 46,494 manufactured home and RV sites and 5,139 wet locations and dry storage spaces.
Rents are on the rise and Sun Communities is capitalizing on this trend. The company has sent notices to its manufactured home residents, expecting average rent increases of 6.2% to 6.4% for 2023. For annual RV residents, rent increases are expected to be between 7.7% and 7.9%.
Truist analyst Anthony Hau has a “buy” rating on Sun Communities and a price target of $163, about 17% above the stock’s current position.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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