There was little in narrow-moat Cohen & Steers' first-quarter results that would alter our long-term view of the firm. We expect to leave our $63 per share fair value estimate in place. We view the shares as being slightly overvalued right now.
A reputation for successful REIT investing has allowed Cohen & Steers to tap into demand for listed alternatives offering diversification from more traditional stock and bond offerings.
Bears
Given its heavier exposure to real estate investments, Cohen & Steers lives and dies by the state of commercial real estate markets and the specialty finance firms that make a living from them.
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Cohen & Steers is a niche asset manager concentrating on real estate securities. The firm invests mainly in the equity shares of real estate investment trusts, with holdings in domestic and international real estate securities accounting for close to two thirds of its $79.3 billion in managed assets at the end of January 2024. Cohen & Steers also manages portfolios dedicated to preferred securities, utilities stocks, and other high-yield offerings. The firm's distribution is balanced among its closed-end funds, open-end funds, and institutional accounts. During the past four calendar quarters, the company garnered 42% (27%) of its managed assets (base management fees) from institutional clients, 45% (52%) from open-end funds, and 13% (21%) from closed-end funds.