LAND - Gladstone Land: Speculating On A 7.4% Yield To Mandatory Call On Preferreds

2024-03-30 11:40:00 ET

Summary

• Gladstone Land is a REIT that owns farmland and leases it to farmers, providing a straightforward business model.
• The REIT remains AFFO positive, generating $5.4M AFFO in Q4 and $20.3M for the full year.
• The preferred shares of Gladstone Land offer a yield of 7.4% if redeemed in January 2026, or 8.3% if not called.

Introduction

As explained in a previous article , the business model of Gladstone Land ( LAND ) is very straightforward: the REIT owns farmland and leases it to farmers. It is not exposed to successful or disappointing harvests other than the impact it has on the tenants. At the end of 2023, Gladstone Land owned almost 112,000 acres across 168 farms in 15 states. I am still very interested in the REIT’s preferred shares and I am particularly intrigued by the value proposition of LANDM as the securities either get called by the end of January 2026, or the preferred dividend yield jumps to in excess of 8%....

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