It goes without saying at this point that the stock market in 2022 is off to a rocky start. Disney's (DIS 0.16%) share prices have fallen about 14% as volatility shakes the market. This is nothing new for Disney, mainly because the pandemic hit the company so hard, and share prices are down more than 21% over the past year. This once-reliable growth stock had tremendous gains during the past 10 years, but concerns over its future mean investors may want to look elsewhere for new growth candidates.
Duke Realty (DRE) is an up-and-coming industrial real estate investment trust (REIT) with promising growth prospects and strong performance both in the short and long term that has the potential to outpace Disney's share price in the future.
2022 isn't looking great for Disney so far
Disney looked like it was on the mend last year, 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 great either. Right now the company is transitioning from being a cable television fixture to becoming a streaming service. This comes with growing pains as revenue declined during the transition.
The company and its investors hope that things will improve as the economy fully recovers from the pandemic. However, a lot of signs are pointing to 2022 as being a tough year for the stock market, and full recovery from the pandemic seems a long way off, both of which are bad news for Disney. The good news is Disney is in a strong financial position, having more than three times as much cash on hand as it did before the onset of the pandemic and lower interest expenses thanks to the extinguishment of debt over the past year.
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 burgeoning e-commerce industry across the country. Over the past five years, Duke Realty has seen share prices increase more than 116%, or 88% more than 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 of its properties is at record highs, hovering at 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 probable that the growth Duke Realty has achieved over the past year is very likely to continue.
Image source: Getty Images.
Will Duke surpass Disney?
Share prices for Duke Realty, while trending lower as the broader stock market declines, are still up over 44% over the past year. If the company is able to maintain that historical momentum, the shares could reach the low $80 range in 2022, up from about $56 now.
For Duke Realty to surpass Disney's share price 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 at about $109 at the end of 2022. That means Duke Realty would need a 91% jump in a single year, which is possible but unlikely given the market turmoil we're seeing already. But it's very likely that Duke will eventually surpass Disney in the future, as it has strong growth prospects, great performance, and exposure to a fast-growing and high-demand industry. So 2023 might be a more plausible date.
