2024-02-18 08:30:00 ET
Summary
- W. P. Carey recently cut its dividend, causing concern among investors.
- The company reported disappointing Q4 earnings, with missed estimates for FFO and revenue.
- Despite these challenges, W. P. Carey has a solid balance sheet and is undervalued, making it a potential buy for long-term investors.
- The REIT has 16.2% of its total debt maturing this year, which will have to be refinanced at a much higher rate.
- Currently, two tenants are having financial troubles, with one operating in bankruptcy. This is expected to have an impact on AFFO for 2024.
Introduction
I was once a shareholder in W. P. Carey ( WPC ), but sold out of the REIT some time ago, way before the company decided to spin off their office properties ( NLOP ), resetting the dividend in the process. Or, in other words, cutting the dividend. Management spun this as a dividend reset, but no matter how you look at it, this was a dividend cut in my view.
However, I do still think the REIT is high-quality. But with the move that it pulled a few months ago I'm sure you can understand why some investors are skeptical, like myself. And I'll be watching them with a close eye for the foreseeable future....
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W. P. Carey: Currently A Bargain, But Management Is Key Going Forward