ADC - Agree Realty: Why I Bought The 5.3% Yielding Commons

2024-03-21 10:31:31 ET

Summary

• Agree Realty's common shares have seen a 20% decline over the past year, making them an attractive investment at 13.9x its fiscal 2023 fourth quarter annualized AFFO.
• The retail REIT reported a 5.2% growth in fourth-quarter AFFO and covered its monthly cash dividend by 135%.
• ADC's portfolio consists of high-quality properties with a 99.8% occupancy rate and a significant portion of annualized base rent derived from investment grade retail tenants.

I've been buying Agree Realty's ( ADC ) common shares in response to continued weakness with shares down roughly 20% over the last year to change hands for 13.9x times its fiscal 2023 fourth quarter annualized AFFO. A year ago this multiple was 18x. The retail REIT reported fourth-quarter AFFO of $1 per share , growing by 5.2% over its year-ago comp. ADC last declared a monthly cash dividend of $0.2470 per share , this was kept unchanged from the prior month and $2.964 per share annualized for a 5.3% dividend yield. The REIT is covering its dividend by 135%, a 74% payout ratio, heightening the probability of a raise this year....

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