BNL - Essential Properties: An Outperforming REIT You Should Accumulate Before Rate Cuts

2024-03-25 10:00:00 ET

Summary

• Essential Properties Realty Trust has outperformed its peers in the REIT sector over the past year, up 10% and up 9% since my last article back in December.
• EPRT's success can be attributed to longer and better lease terms, and slightly higher rent escalators compared to its peers. In my opinion, this led to their outperformance vs peers.
• The company reported strong Q4 earnings, with FFO increasing by 7.6% year-over-year and revenue growing by nearly 32%.
• Their lower tenant quality gives the REIT a higher risk, higher reward profile. It also makes them more susceptible to economic downturns like a recession, impacting EPRT's growth going forward.

Introduction

With the REIT sector in a bear market for the last 2 years, investors may be left wondering when things will get better for the sector. According to the FED, it should be the latter part of this year. Whether that happens or not remains to be seen but I am optimistic for what's ahead. As a dividend investor, I have a sizable portion of my portfolio in real estate investment trusts....

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