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W.P. Carey Stock Rises 12% in 3 Months: Will the Trend Continue?
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Shares of W.P. Carey (WPC - Free Report) have rallied 12% over the past three months, outperforming the industry's upside of 2%.
W. P. Carey is a real estate investment trust (REIT) engaged in providing long-term sale-leaseback and build-to-suit financing for companies. The firm primarily invests in commercial properties that are generally triple-net leased to single corporate tenants.
On March 13, this industrial REIT cheered its investors with a 1.1% dividend hike. WPC will now pay out a first-quarter 2025 cash dividend of 89 cents per share, up from 88 cents paid in the prior quarter.
Analysts seem positive about this Zacks Rank #3 (Hold) company. The Zacks Consensus Estimate for its 2025 funds from operations (FFO) per share has been revised northward by 1% to $4.84 over the past three months.
Image Source: Zacks Investment Research
Factors Behind WPC Stock Price Rise: Will This Trend Last?
W.P. Carey has one of the largest portfolios of single-tenant net lease commercial real estate in the United States and Northern and Western Europe. The company invests in high-quality assets that are mission-critical for its tenants’ operations. As such, due to the inherent nature of its portfolio, the REIT can generate better risk-adjusted returns due to higher occupancy. The portfolio occupancy as of Dec. 31, 2024 was 98.6%.
Moreover, the portfolio is well-diversified by tenant, industry, property type and geography, aiding steady revenue generation. The existence of rent escalations yields stable cash flows. More than 99% of annualized base rent comes from leases with contractual rent increases, with 51% linked to the consumer price index. The company witnessed contractual same-store rent growth of 2.6% for the fourth quarter of 2024.
W.P. Carey has been capitalizing on growth opportunities. In 2024, the company acquired a total of 29 properties for $1.4 billion and disposed of a total of 176 properties for $1.2 billion. For 2025, the total investment value is estimated between $1 and $1.5 billion and total dispositions between $500 million and $1 billion. With solid access to capital, the company is well-poised to take advantage of any potential opportunity.
WPC has a healthy balance sheet position with ample liquidity. As of Dec. 31, 2024, the company had a total liquidity of $2.6 billion, including around $1.9 billion of available capacity under its senior unsecured credit facility and $640.4 million of cash and cash equivalents. W.P. Carey’s share of pro rata net debt to EBITDA was 5.5X. The company also enjoys investment grade ratings of BBB+ from S&P Global Ratings and Baa1 from Moody’s, rendering it favorable access to the debt market.
Solid dividend payouts are arguably the biggest enticement for investment in REIT stocks. However, in December 2023, WPC reduced its dividend to 86 cents from the prior quarter's dividend payment of $1.07. The move resulted from the company’s strategic plan to exit its office assets and maintain a lower payout ratio. Thereafter, it maintained a disciplined capital distribution strategy and increased its dividend three times, including the most recent one, which is encouraging. Check out W.P. Carey’s dividend history here.
Key Risks for WPC
High competition for investments from many other institutions and investors, including other REITs, private equity firms, pension funds, and real estate companies, potential tenant bankruptcies and high interest expenses remain concerns for W.P. Carey.
The Zacks Consensus Estimate for Welltower’s 2025 FFO per share is pegged at $4.90, suggesting year-over-year growth of 13.4%.
The Zacks Consensus Estimate for Cousins Properties’ 2025 FFO per share stands at $2.79, indicating an increase of 3.7% from the year-ago reported figure.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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W.P. Carey Stock Rises 12% in 3 Months: Will the Trend Continue?
Shares of W.P. Carey (WPC - Free Report) have rallied 12% over the past three months, outperforming the industry's upside of 2%.
W. P. Carey is a real estate investment trust (REIT) engaged in providing long-term sale-leaseback and build-to-suit financing for companies. The firm primarily invests in commercial properties that are generally triple-net leased to single corporate tenants.
On March 13, this industrial REIT cheered its investors with a 1.1% dividend hike. WPC will now pay out a first-quarter 2025 cash dividend of 89 cents per share, up from 88 cents paid in the prior quarter.
Analysts seem positive about this Zacks Rank #3 (Hold) company. The Zacks Consensus Estimate for its 2025 funds from operations (FFO) per share has been revised northward by 1% to $4.84 over the past three months.
Image Source: Zacks Investment Research
Factors Behind WPC Stock Price Rise: Will This Trend Last?
W.P. Carey has one of the largest portfolios of single-tenant net lease commercial real estate in the United States and Northern and Western Europe. The company invests in high-quality assets that are mission-critical for its tenants’ operations. As such, due to the inherent nature of its portfolio, the REIT can generate better risk-adjusted returns due to higher occupancy. The portfolio occupancy as of Dec. 31, 2024 was 98.6%.
Moreover, the portfolio is well-diversified by tenant, industry, property type and geography, aiding steady revenue generation. The existence of rent escalations yields stable cash flows. More than 99% of annualized base rent comes from leases with contractual rent increases, with 51% linked to the consumer price index. The company witnessed contractual same-store rent growth of 2.6% for the fourth quarter of 2024.
W.P. Carey has been capitalizing on growth opportunities. In 2024, the company acquired a total of 29 properties for $1.4 billion and disposed of a total of 176 properties for $1.2 billion. For 2025, the total investment value is estimated between $1 and $1.5 billion and total dispositions between $500 million and $1 billion. With solid access to capital, the company is well-poised to take advantage of any potential opportunity.
WPC has a healthy balance sheet position with ample liquidity. As of Dec. 31, 2024, the company had a total liquidity of $2.6 billion, including around $1.9 billion of available capacity under its senior unsecured credit facility and $640.4 million of cash and cash equivalents. W.P. Carey’s share of pro rata net debt to EBITDA was 5.5X. The company also enjoys investment grade ratings of BBB+ from S&P Global Ratings and Baa1 from Moody’s, rendering it favorable access to the debt market.
Solid dividend payouts are arguably the biggest enticement for investment in REIT stocks. However, in December 2023, WPC reduced its dividend to 86 cents from the prior quarter's dividend payment of $1.07. The move resulted from the company’s strategic plan to exit its office assets and maintain a lower payout ratio. Thereafter, it maintained a disciplined capital distribution strategy and increased its dividend three times, including the most recent one, which is encouraging. Check out W.P. Carey’s dividend history here.
Key Risks for WPC
High competition for investments from many other institutions and investors, including other REITs, private equity firms, pension funds, and real estate companies, potential tenant bankruptcies and high interest expenses remain concerns for W.P. Carey.
Stocks to Consider
Some better-ranked stocks from the broader REIT sector are Welltower (WELL - Free Report) and Cousins Properties (CUZ - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Welltower’s 2025 FFO per share is pegged at $4.90, suggesting year-over-year growth of 13.4%.
The Zacks Consensus Estimate for Cousins Properties’ 2025 FFO per share stands at $2.79, indicating an increase of 3.7% from the year-ago reported figure.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.