W. P. Carey Adjusted FFO Declines Amid Strategic Shift

W. P. Carey sees adjusted FFO decline to $4.70 amid asset sales. As it sells off properties and pivots from the office sector, stock remains a viable buy under $60.

Date: 18-02-2025

AI Rating: 5

Stock Performance and Current Price Point
W. P. Carey currently trades just below $60, above its low for the year but still behind its 52-week high. This positions the stock in a reflective state for investors considering entry at a competitive price.

Earnings Per Share (EPS) and Adjusted Funds from Operations (FFO)
The report highlights a challenging year for W. P. Carey, with a reported decline in adjusted funds from operations (FFO) of 9.3%, bringing it to $4.70 per share. This decline is mainly attributed to significant asset sales as the company exited the office sector.

Future Expectations
Despite the prior year's decline, the company anticipates growth. W. P. Carey expects to grow its adjusted FFO to a range of $4.82 to $4.92 per share in the upcoming year, indicating a projected growth rate of more than 3.5% at the midpoint, which could positively impact stock sentiment.

Investment and Selling Strategy
In 2024, W. P. Carey engaged in capital recycling, closing deals worth $1.6 billion, primarily in warehouse, industrial, and retail properties. This activity positions the company for a recovery following the significant asset sales and re-establishment of its portfolio. These actions could attract additional investors and stabilize stock prices.

Dividend Yield
Furthermore, the company's dividend yield stands at an appealing 6%. This is notably higher when compared to peers like Agree Realty and Stag Industrial, each at 4.3%. Given that dividend growth is linked to FFO increase, the high yield is likely to maintain investor interest, even amid mixed performance indicators.

Valuation Overview
Currently, the stock trades at 12.3 times the adjusted FFO at the midpoint of its forecast, which is attractive in comparison to its sector peers trading above that level. However, some diversified peers trade lower with weaker financial profiles, indicating potential growth for W. P. Carey if it capitalizes on new investments effectively.

Stocks: WPC