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W.P. Carey: The Sustainable 6% Yield

Published Fri, 18 Sep 2020 07:00:00 -0400 on Seeking Alpha

Seeking AlphaREITsW.P. Carey: The Sustainable 6% YieldSep. 18, 2020 7:00 AM ET|| About: W. P. Carey Inc. (WPC), Includes: COST, NNN, NNN.PF, O, TGT, WMTby: Colorado Wealth Management FundColorado Wealth Management Fund The REIT ForumThe #1 REIT Service Measured By Total ReturnsSummaryWPC is a large triple net lease REIT with a high dividend yield and respectable coverage. It will be an appealing choice for most dividend growth investors.
WPC’s rent collections have remained strong, running at 98% for August. Strengthening collections throughout the sector are helping to boost share prices.
The REIT has extensive diversification throughout its portfolio and less retail exposure than most triple net lease REIT peers. It also has more industrial properties than most peers.
WPC delivered more than two decades of consecutive dividend growth for long-term shareholders and strong total returns as well. However, recent prices look quite reasonable.
Low interest rates are favorable for triple net lease REITs because higher Treasury prices often drive higher share prices. These REITs look to grow often by issuing new equity about NAV and acquiring more properties.
W.P. Carey (WPC) is one of the largest and best triple net lease REITs. This is a solid choice for most buy-and-hold investors. Shares carry a risk rating of 2 and a dividend yield just over 6%. There are a few things you’ll want to know about WPC before we get started:
They are an international REIT with significant exposure to Western Europe. They are able to use their European exposure to issue lower-cost debt. They significantly reduced their overall leverage during the last year, which resulted in reducing their risk rating from 2.5 to 2.0 over last winter. The portfolio includes an emphasis on industrial and warehouse assets. Pricing in industrial REITs demonstrates the demand for these assets. A strategic merger in 2018 simplified the company and made it significantly more appealing. Triple net... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
NATIONAL RETAIL PROPERTIES 54.39   35.8 1.52 2.06 3.81
REALTY INCOME 74.49   56.9 1.31 2.72 3.69
TARGET 108.94   18.0 6.04 2.64 2.43
WAL-MART STORES 116.92   26.3 4.44 2.12 1.83
COSTCO WHOLESALE 289.89   35.6 8.15 2.60 0.88


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