Quarterly results showed the trust is able to overcome Covid-19-related headwinds
Shares of W.P. Carey trade nearly 23% below their 52-week
high. News that a vaccine for Covid-19 has shown promising results has given a
lift to the entire market, but shares of W.P. Carey are higher by almost 10%
since its quarterly results release, even beating the 7.5% gain of the S&P
500 index.
I continue to believe that W.P. Carey is one of the
strongest REITs in the market place and can still be bought at a good valuation
despite this return over the last two weeks. Let's look at the trust's most
recent quarter to see why I believe the stock is an excellent candidate for purchase.
Recent results
W.P. Carey Inc. (NYSE:WPC) reported its most recent
financial results on Oct. 30 for the period ending Sept. 30. The REIT's revenue
fell 4.9% to $302.4 million, but this was $5.5 million better than Wall Street
analysts had expected. Funds from operation improved 27 cents, or 24.8%, to
$1.36, which was 26 cents above estimates.
While other REITs have seen their occupancy rates fall due
to the ongoing pandemic, W.P. Carey has weathered the storm quite well. As of
the end of September, 98.9% of the REIT's properties were occupied. This is
higher than W.P. Carey's average occupancy rate of 98.4% since 2008.
The REIT's occupancy rates are likely to continue to remain
high in the coming years as well. Only in two years this decade does W.P. Carey
have leases set to expire that total more than 5% of its annual base rent (2024
and 2027). A majority of leases (54.3%) aren't scheduled to expire until after
2029.
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