Can This Real Estate Stock Build On Its Huge 2020?

Walker & Dunlop stock is up 7% year-to-date

Mar 22, 2021 at 10:48 AM
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Walker & Dunlop, Inc. (NYSE:WD) is one of the largest commercial real estate finance companies in the United States. The company provides a range of capital solutions for all commercial real estate asset classes, as well as investment sales brokerage services to owners of multifamily properties. Walker & Dunlop's employs over 1000 professionals and operates 41 offices across the nation.

On March 15, Walker & Dunlop announced its acquisition of Tender Hearts Assisted Living, a 50-unit facility located in Green Bay, Wisconsin. Walker & Dunlop was able to obtain a $9,089,800 U.S. Department of Housing and Urban Development loan for the $10,100,000 acquisition. The financing structure also included an $800,000 seller note, bringing the combined loan-to-cost to 98%.

Walker & Dunlop stock has increased 164% year-over-year and over 300% since its four-year low of $24.55 on April 3. The shares are fresh off a March 18 record high of $113.79. Additionally, Walker & Dunlop offers a $2.00 forward dividend, which equates to a dividend yield of 1.85%.

Fundamentally, Walker & Dunlop stock has a decent valuation with a price-earnings ratio of 13.33. WD also has a forward price-earnings ratio of 10.99, which is extremely attractive for a company that has grown revenues by more than $350 million or 50% since fiscal 2017. For fiscal 2020, Walker & Dunlop reported revenues of $1.08 billion, up from $817 million in fiscal 2019. On the bottom line, the company added about $75 million in net income this past year, bringing their total up to $246 million. One of the biggest concerns for potential investors in Walker & Dunlop stock is its total debt of $2.91 billion and its lack of cash. WD has just $370.88 million in cash and cash equivalents. Nonetheless, Walker & Dunlop is currently presenting an interesting investment opportunity for value investors.


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