WPC - W. P. Carey: Returning To A New Normal

2024-07-03 17:11:18 ET

Summary

• W. P. Carey management faces market skepticism after a challenging year, but potential gains towards historical valuation remain.
• The stock price indicates high pessimism about the future, presenting minimal downside risk and substantial recovery potential.
• WPC aims for steady business and dividend growth. That could lead to the stock eventually surpassing old highs.
• The investment grade rating of the debt increases the safety of the investment.
• The first quarter was important to re-establishing the consistency and slow growth that the company had for a reputation for before the spinoff and dividend cut.

W. P. Carey ( WPC ) management seems to be attempting to establish a new normal after a gut-wrenching year. So far, the market is not buying it. Despite that, the argument from the previous article that W. P. Carey is a strong buy remains. The decisions made over the past year are not going to be easily forgotten. But the potential gains from a return to a historical valuation (or maybe better) are still there.

The latest dividend declaration of $.87 per share would appear to be an attempt to get back to a steadily rising dividend. This will succeed if earnings rise accordingly to prevent the rather low dividend coverage that occurred before the dividend was "adjusted downward". It is a little early to tell how this will work out, but management has clearly begun to start a new record of consistency....

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