EPRT - Netstreit: Worth Holding But There Are Better Alternatives
2024-07-14 06:09:14 ET
Summary
- NETSTREIT is worth holding due to strong business metrics, well-covered dividends, no debt maturing until 2027, reasonable valuation, investment-grade tenants, and impressive AFFO per share growth.
- However, there are better alternatives within the retail/service-oriented property sector due to NTST's lower investment spreads, negligible dividend growth, high tenant concentration, and limited upside potential.
- I perceive ADC, EPRT, and NNN as more attractive opportunities. They share NTST's strengths and have better managed their weaknesses.
Investment Thesis
NETSTREIT (NTST) is worth holding as the Company operates within the resilient property sector and has:
- Strong business metrics in terms of occupancy rate and WALT
- well-covered dividends with a low AFFO payout ratio
- no debt maturing until 2027
- reasonable valuation
- strong, investment-grade tenants, and
- track record of impressive AFFO per share growth.