2022 is off to a rocky start in the stock market. Disney's (DIS 0.50%) share prices have fallen 5.13% as volatility shakes the market. This is nothing new for Disney after the pandemic hit the company hard. Share prices are down 20.53% over the past year as the company failed to fully recover from pandemic impacts. This once-reliable growth stock saw tremendous gains over the past ten years, but concerns over its future mean investors may want to look elsewhere for new growth buys.
Duke Realty (DRE) is an up-and-coming industrial real estate investment trust (REIT) that is showing promising growth prospects and strong performance both in the short and long term that has the potential to outpace Disney in the near future.
2022 isn't looking great for Disney so far
2020 was absolutely horrible for the company, with 2021 showing positive signs toward recovery. But thanks to the latest outbreak of the highly contagious omicron variant, much of that progress could be erased. It's clear why the pandemic is bad business for its theme parks, but Disney's network business isn't doing stellar either. Right now the company is transitioning from cable television to being a streaming service at its core. This comes with growing pains as revenues decline during the transition.
The company and its investors have hope that things will improve as we fully recover from the coronavirus. However, a lot of signs are pointing to 2022 being a tough year for the stock market, and full recovery from the virus seems long off, both of which are bad news for Disney. The good news is Disney's strong financial position, having over three times the cash on hand as it did prior to the onset of the pandemic.
Image source: Getty Images.
Duke Realty is growing like crazy
Duke Realty is an industrial REIT that specializes in the ownership and leasing of roughly 533 logistics warehouses primarily for the budding e-commerce industry across the country. Over the past five years, Duke Realty has seen share prices increase over 116%, an over 88% difference from Disney during that same period.
As e-commerce continues to take America by storm, the last few years have been wonderful for Duke Realty. Occupancy for its properties is at record highs, hovering just over 98% while its net lease growth year over year (YOY) was 34.8% as of the third quarter of 2021. Considering the demand for industrial space is at an all-time high, it's likely the growth Duke Realty has achieved over the past year is very likely to continue in the future.
Image source: Getty Images.
Will Duke surpass Disney?
Share prices for Duke Realty, while trending downward right now due to market volatility, are still up over 44% over the past year. If the company is able to maintain that momentum, it has the potential to reach share prices in the low $80 range in 2022.
In order for Duke Realty to surpass Disney this year, Disney's share prices would need to continue on its downward trajectory for the remainder of 2022, which isn't out of the question. If Disney were to fall another 20% as it did over the past year, share prices would sit around $109 at the end of 2022. That means Duke Realty would need to see a 91% jump in a single year, which is possible but unlikely given the market volatility we're seeing already. It's very likely that Duke will eventually surpass Disney in the near future, as it has strong growth prospects, great performance, and exposure to a fast-growing and high-demand industry -- I just don't think 2022 will be the year.
