Rates Down, REITs Up: Two Quality REITs To Own For Long-Term Gains
Agree Realty and CareTrust REIT share prices have rallied since July due to cooling inflation. Additionally, both offer long-term upside due to high-quality business models and strong fundamentals. Agree Realty benefits from investment-grade tenants, a strong balance sheet, and a superior cost of capital, making them less susceptible to economic downturns. CareTrust REIT excels with a low net debt to EBITDA, a strong acquisition pipeline, and a well-covered dividend, positioning them for future growth.
Agree Realty: This REIT Is Almost The Most Expensive In Net Lease
We assigned a Strong Buy rating to ADC due to its superior AFFO growth, lower cost of capital, and trading at a discount. ADC has outperformed the net lease sector, returning 30% since April, driven primarily by multiple expansion from 14.2x to 17.8x forward AFFO. Despite recent gains, ADC is now expensive relative to peers but remains a strong long-term Buy due to its solid business model and CEO alignment.
Understanding Net Lease REITs: Portfolio Quality
Today, we explore portfolio quality, applying the ideas of The Real Estate Chair. The four legs of the real estate chair include tenant credit quality, unit level performance, location, and fungibility of assets. We explore two net lease REITs who apply this concept with varying degrees of success.
BioNTech: Clinical Hold Removal Pushes ADC Development Program Forward
Partial clinical hold of BioNTech SE's BNT326/YL202 for the treatment of patients with solid tumors in phase 1 study was lifted by the FDA. The primary endpoint of ORR of BNT111 in combination with Libtayo, for the treatment of patients with anti-PD-1/anti-PD-L1 relapsed/refractory or unresectable stage III or IV melanoma, met with statistical significance. Positive results obtained from an open-label phase 2 study, using BNT311 + Keytruda for the treatment of patients with relapsed/refractory metastatic non-small cell lung cancer; 12-month overall-survival [OS] rate of 69%.
Agree Realty: Common Or Preferred? One Is The Better Buy
Agree Realty is a high-quality stock for income investors with resilient recession and e-commerce-resistant tenants. ADC's common stock has seen significant gains, leading to a higher valuation, making its Preferred Series A shares a more attractive option. With a solid balance sheet, strong credit ratings, and a well-covered 4.2% dividend yield, ADC is well-positioned for steady growth.
Why REITs May Pummel Tech
REITs have been one of the worst-performing sectors since early 2022. However, REITs have recently become one of the best-performing sectors, outperforming tech stocks and the S&P 500 by a wide margin. We share why this trend is likely to continue moving forward.
Big Dividends From A Recession-Resistant Portfolio
There are growing risks of a recession hitting due to weakening job numbers, rising unemployment, and weakening consumer spending capacity. We share a portfolio of high-yield stocks that should be able to weather a recession quite well. The yields range from 4.5%-14%.
Why Agree Realty Stock Jumped Over 11% in July
Agree Realty posted strong second-quarter results in July. The REIT also received a credit rating upgrade.
This High-Yield Dividend Stock Continues to Show Why It's a Phenomenal Passive Income Investment
Agree Realty continues to grow its cash flow, portfolio, and dividend. The REIT enhanced its ability to continue expanding in the first half of this year.
A Must-Read Net Lease Masterclass For REIT Investors
Net lease REITs provide efficient real estate capital for companies, creating wealth for shareholders, employees, and stakeholders. Business model transparency is key for value investing in net lease REITs. Chris Volk applies a universal business model to compare five top net lease REITs.
An Important Warning For High-Yield Dividend Stocks
High-yield dividend stocks have been rallying on expectations of a Fed rate cut in September. However, I think the market may be overly optimistic. I share the main headwind likely facing high-yield stocks moving forward and how I am investing in light of this.
Agree Realty Is Set To Outperform Its Peers: Here's Why
Agree Realty is still attractive after a recent stock price increase. ADC has top-tier portfolio quality reflected within its occupancy rate, WALT, and share of ABR derived from investment-graded tenants. The Company increases investment volume at wide, positive investment spreads, suggesting improving market conditions.
