Macy's Real Estate: Yes, There Are Duds, but Don't Underestimate the Gems

Macy's (NYSE: M) stock has lost two-thirds of its value since mid-2015. Some of the stock's decline can be explained by a reduction in the company's earnings over that period. However, most of the drop has come from multiple contraction. This development suggests that investors are worried that Macy's earnings power will decline still further in the coming years.

As Macy's stock has moved lower, a growing number of investors have become interested in the company's real estate. If Macy's real estate is worth more than its entire market value, it would represent a huge safety net for shareholders if the retail business continues to go south. That said, many investors -- such as my Foolish colleague Rich Duprey -- think the decline of mall-based retail will dramatically impair the value of Macy's real estate.

Hundreds of malls are dying because of weak customer traffic. Image source: author.

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Source: Fool.com