LANDM - Gladstone Land: The Series B Preferred Shares Look Attractive

2024-05-17 23:35:45 ET

Summary

• Gladstone Land preferred shares fund a third of the REIT's balance sheet, on par with debt and equity market capitalization.
• The Series B preferred shares offer a 7.7% yield, covered by core FFO 1.9 times.
• The shares trade at a discount to par, amplifying the safety offered by the $482 million market capitalization.
• I estimate the fair value at about $21.1/share per series B preferred share.
• Key risks include further issuance of preferred stock and eventual refinancing of debt.

Introduction

The Gladstone Land Series B preferred shares ( LANDO ) have largely performed in line with the VanEck Preferred Securities ex Financials ETF ( PFXF ) so far in 2024, posting a low-single-digit return:

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