Agree Realty Corporation stock has had a nice run-up over the past 6 months. The stock is now in the red zone on critical metrics. We discuss these and tell what looks better.
With just a month left to the year, the S&P 500 is up 26% in 2024. Unless there's some major news over the next few weeks, the year will close out with a strong gain.
Agree Realty is one of the more impressive triple-net lease REITs out there, with an upside that's non-trivial at the right valuation. That upside is no longer there, with the company trading far higher than when I bought it. As a result of this, using Q3'24 results, I am reiterating "Hold" on Agree Realty stock with the following specifics.
Realty Income (O) is the 800-pound gorilla in the net lease sector, with a massive $50 billion market cap. It's four times larger than its next closest competitor, and more than six times the size of fast-growing peer Agree Realty (ADC -0.07%).
REITs are priced at decade-low valuations. Such low valuations have historically resulted in very high returns. We highlight 2 REITs that offer high yield and upside potential.
Mizuho raised the firm's price target on Agree Realty to $80 from $75 and keeps a Neutral rating on the shares as part of a broader research note. The firm is turning less constructive on Triple Net REITs as expectations of higher inflation and a "higher for longer" rate environment should weigh on the sector's investment spreads and growth potential, marking the end of the "pivot party", the analyst tells investors in a research note. Mizuho adds however Agree Realty stands apart as it has pre-funded its acquisition pipeline, with the management team having issued forward equity to lock in today's stock price.
Warren Buffett's recent moves into Treasury bonds aren't necessarily suitable for everyday investors, and there are attractive stock opportunities like Agree Realty. ADC offers a 4% dividend yield, a strong balance sheet, and a history of consistent shareholder returns, making it a solid long-term investment. ADC's strategic portfolio management and development initiatives have positioned it well for future growth, with a focus on high-quality, recession-resistant tenants.
REITs have recently seen their share prices dip, likely due to the upcoming presidential election as well as rising geopolitical tensions. NNN REIT and VICI Properties are two fundamentally sound REITs that offer long-term investors solid upside potential. Both recently reported strong Q3 earnings with solid FFO, AFFO, and revenue growth on an annualized basis.
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Not everything is perfect in REIT world. On the contrary, this is a sector in which you need to be very selective. Here are 5 types of REITs to avoid at all cost: