DEA - Easterly Government Properties: Will Lower Interest Rates And A New CEO Help This REIT Get Back To Growth?

2024-05-22 14:30:13 ET

Summary

• Easterly Government Properties (DEA) expects to achieve 2% FFO growth for 2024 and beyond, despite challenges in the economic environment.
• DEA is a REIT focused on acquiring and developing properties for the U.S. government, with a portfolio of 93 properties across 26 states.
• The company has potential for future growth through property acquisitions and has a solid balance sheet with manageable debt maturities.
• DEA's cash available for distribution grew year-over-year, but was still not enough to cover the current dividend with a payout ratio above 100%. However, management stated they have no plans to cut the dividend.
• If the company can't execute on its growth strategies, then a dividend cut may be inevitable in the medium to long term.

Introduction

Easterly Government Properties ( DEA ) is a REIT that has been on my radar for quite some time. As a former government employee and frequent investor in REITs, DEA has always been one I've paid close attention to. As a result of challenges in lieu of the current economic environment with higher for longer interest rates, I rate the stock a hold as they continue to find their footing on a path to growth. ...

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