Economic Overview - U.S. equity markets showed mixed performance, with the S&P 500 declining by 0.8% and the Small-Cap 600 increasing by 3.6% [3][5] - Benchmark interest rates fell to four-month lows, with the 10-Year Treasury Yield at 4.19% and the 2-Year Treasury Yield at 4.39% [5][6] - The Federal Reserve is expected to begin cutting rates by September, with a 100% probability now priced in for a rate cut [5][6] Real Estate Sector Performance - Real estate equities outperformed, with the Equity REIT Index gaining 0.9% and 10 out of 18 property sectors in positive territory [3][12] - Homebuilders rallied nearly 4% due to solid earnings results and expectations of rate relief, despite disappointing home sales data [3][12] Earnings Season Insights - The earnings season for real estate has shown strong results, with 74% of equity REITs raising their full-year outlook [12][13] - Office REITs reported improved leasing activity, with occupancy rates increasing for the first time in two years [12][15] - Net lease REITs also performed well, with Agree Realty raising its full-year FFO outlook due to record-high occupancy [15] Specific Sector Highlights - The cold storage operator Lineage raised $4.44 billion in an IPO, marking the largest REIT IPO in history [13] - Gaming and Leisure Properties (GLPI) raised its full-year outlook after solid second-quarter results, expecting FFO growth of 1.6% [17] - Digital Realty (DLR) faced a decline of 6% after reporting disappointing results, maintaining its full-year outlook with FFO growth of 1.3% [18] Economic Data Recap - Key economic indicators included a 2.8% annualized GDP growth rate for Q2, a decline in durable goods orders by 6.6%, and a mixed performance in retail sales [7][9] - Existing home sales for June were reported at 3.89 million, below the forecast of 3.99 million [8]

Richard Drury Introduction I often think about stocks that I am confident will continue to perform well over the long-term. Ones whose businesses remain strong and are likely to see solid growth over the next decade or so. Even through uncertain periods in the economy. But some businesses remain resilient during turbulent times, and are likely here to stay. This is because of their recession-resistant business models, strong fundamentals, and exceptional management teams that keep them operating at hig ...

Group 1: State of American Consumers - The top 40% of income earners saved the majority of excess savings during the COVID-19 pandemic, while lower-income households saw significant increases in savings due to stimulus checks [4][5] - In 2022, higher-income households began to spend their accumulated savings, while lower-income consumers relied on wage growth to sustain spending [5][6] - Credit card debt has surged as many consumers shifted from saving to spending, leading to increased interest payments on non-mortgage consumer debt [5][6][8] - As of Q1 2024, credit card delinquencies reached their highest level since the Great Financial Crisis, indicating financial strain among lower-income consumers [8][6] Group 2: Market Trends and Investment Opportunities - A significant market rotation has occurred, with real estate outperforming big tech stocks recently, indicating a shift in investor sentiment [9][10] - The Nasdaq index has seen a decline in assets under management, while small-cap ETFs have experienced a substantial increase, suggesting a potential multi-year outperformance of average stocks [11][13] - Agree Realty (ADC) has shown strong performance, with a stock price increase of approximately 13% over the last month, attributed to its adaptability in a higher interest rate environment [15][17] - Cullen/Frost Bankers (CFR) has rebounded nearly 8% after reporting decent Q2 2024 earnings, highlighting its strong position in the Texas market despite current challenges [18][20] Group 3: Life Science Real Estate Market - The life science real estate sector is currently in a bear market, with elevated demand from previous years normalizing and record-high space deliveries [24][27] - Alexandria Real Estate Equities (ARE) reported solid leasing volume in 2024, maintaining performance in a challenging market, with a projected rebound in venture capital deployment for biotech firms [25][27] - Despite current challenges, the long-term outlook for the life sciences industry remains positive due to aging demographics and consistent demand for lab space [28][27] Group 4: Temp Staffing Industry - Robert Half Inc. (RHI) has seen a decline in revenue due to a weaker labor market, with total revenue down about 5% from the end of 2019 [29][31] - The company maintains a capital-light business model with zero debt, which has historically facilitated high returns on invested capital [33][35] - RHI's dividend yield has reached around its COVID-era high, indicating that the dividend remains secure despite current challenges [35][36]

Agree Realty Corporation (NYSE:ADC) Q2 2024 Earnings Conference Call July 24, 2024 9:00 AM ET Company Participants Reuben Treatman - Senior Director of Corporate Finance Joey Agree - President & Chief Executive Officer Peter Coughenour - Chief Financial Officer Conference Call Participants Ronald Kamdem - Morgan Stanley Smedes Rose - Citi Farrell Granath - Bank of America Mitch Germain - Citizens JMP Eric Borden - BMO Capital Markets Brad Heffern - RBC Capital Markets Alec Feygin - Baird Upal Rana - KeyBanc ...

Core Insights - Agree Realty (ADC) reported revenue of $152.58 million for Q2 2024, a year-over-year increase of 17.5% and a surprise of +1.50% over the Zacks Consensus Estimate of $150.33 million [1] - The earnings per share (EPS) for the same period was $1.04, compared to $0.42 a year ago, with an EPS surprise of +0.97% over the consensus estimate of $1.03 [1] Revenue Breakdown - Rental income was reported at $152.42 million, exceeding the five-analyst average estimate of $149.79 million, reflecting a year-over-year change of +17.4% [2] - Operating cost reimbursement revenue was $15.94 million, slightly below the average estimate of $16.20 million, but showed a +10% change compared to the previous year [2] - Other revenues reached $0.15 million, significantly surpassing the estimated $0.03 million, marking a remarkable +529.2% change year-over-year [2] Performance Metrics - The diluted net earnings per share was reported at $0.52, exceeding the five-analyst average estimate of $0.44 [2] - Over the past month, shares of Agree Realty have returned +7.4%, outperforming the Zacks S&P 500 composite's +2% change [2] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [2]

Agree Realty (ADC) came out with quarterly funds from operations (FFO) of $1.04 per share, beating the Zacks Consensus Estimate of $1.03 per share. This compares to FFO of $0.98 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an FFO surprise of 0.97%. A quarter ago, it was expected that this real estate investment trust would post FFO of $1.01 per share when it actually produced FFO of $1.03, delivering a surprise of 1.98%.Over the last four quarters ...

[Financial and Operating Highlights](index=1&type=section&id=Financial%20and%20Operating%20Highlights) The company reported strong Q2 and first-half 2024 results, highlighted by significant investment activity, double-digit growth in Net Income per share, and robust increases in both Core FFO and AFFO per share Second Quarter 2024 Highlights | Metric | Value | | :--- | :--- | | Investment in retail net lease properties | ~$203 million (70 properties) | | Net Income per share | $0.52 (+25.6% YoY) | | Core FFO per share | $1.03 (+5.7% YoY) | | AFFO per share | $1.04 (+6.4% YoY) | | July monthly dividend | $0.250 per share (+2.9% YoY) | | Total Liquidity (Proforma) | ~$1.7 billion | | Proforma Net Debt to Recurring EBITDA | 4.1x | First Half 2024 Highlights | Metric | Value | | :--- | :--- | | Investment in retail net lease properties | ~$343 million (102 properties) | | Net Income per share | $0.95 (+11.3% YoY) | | Core FFO per share | $2.05 (+4.6% YoY) | | AFFO per share | $2.07 (+5.5% YoY) | | Declared dividends per share | $1.491 (+2.9% YoY) | [Financial Performance](index=2&type=section&id=Financial%20Performance) The company demonstrated robust financial growth in Q2 and H1 2024, with Net Income, Core FFO, and AFFO all showing significant year-over-year increases in both absolute terms and on a per-share basis [Financial Results (Net Income, Core FFO, AFFO)](index=2&type=section&id=Financial%20Results) For Q2 2024, Net Income per share rose **25.6% to $0.52**, Core FFO per share grew **5.7% to $1.03**, and AFFO per share increased **6.4% to $1.04** Net Income Attributable to Common Stockholders (YoY Growth) | Period | Amount | Per Share | Per Share Growth | | :--- | :--- | :--- | :--- | | Q2 2024 | $52.9M | $0.52 | +25.6% | | H1 2024 | $95.9M | $0.95 | +11.3% | Core FFO (YoY Growth) | Period | Amount | Per Share | Per Share Growth | | :--- | :--- | :--- | :--- | | Q2 2024 | $104.2M | $1.03 | +5.7% | | H1 2024 | $206.2M | $2.05 | +4.6% | AFFO (YoY Growth) | Period | Amount | Per Share | Per Share Growth | | :--- | :--- | :--- | :--- | | Q2 2024 | $105.3M | $1.04 | +6.4% | | H1 2024 | $208.6M | $2.07 | +5.5% | [Dividends](index=2&type=section&id=Dividend) The company declared a monthly dividend of **$0.250 per share** for Q2, a **2.9% year-over-year increase**, resulting in a payout ratio of approximately **72% of AFFO** - Declared a monthly cash dividend of **$0.250 per common share** for each month in Q2 2024, a **2.9% increase** over Q2 2023[7](index=7&type=chunk) - The Q2 dividends represent payout ratios of approximately **73% of Core FFO per share** and **72% of AFFO per share**[7](index=7&type=chunk) - Subsequent to quarter end, a monthly dividend of **$0.250 per common share** was declared for July 2024[8](index=8&type=chunk) [2024 Guidance and CEO Outlook](index=3&type=section&id=2024%20Guidance%20and%20CEO%20Outlook) Driven by strong performance and a growing investment pipeline, the company raised its full-year 2024 guidance for both AFFO per share and acquisition volume [Revised 2024 Guidance](index=3&type=section&id=Earnings%20Guidance) The company increased its 2024 AFFO per share guidance to a range of **$4.11 to $4.14** and raised its acquisition volume target from approximately **$600 million to $700 million** Revised 2024 Guidance | Metric | Prior Guidance | Revised Guidance | | :--- | :--- | :--- | | AFFO per share | $4.10 to $4.13 | $4.11 to $4.14 | | Acquisition volume | ~$600 million | ~$700 million | | Disposition volume | $50 to $100 million | $60 to $100 million | [CEO Comments](index=3&type=section&id=CEO%20Comments) The CEO highlighted the successful capital raising of nearly **$650 million** in the quarter, the proforma liquidity of **$1.7 billion**, and the growing investment pipelines as key factors supporting the increased full-year guidance for acquisitions and AFFO per share, which is now projected to grow **4.4%** at the midpoint - The company raised nearly **$650 million** of capital during the quarter, bolstering the balance sheet[10](index=10&type=chunk) - Total liquidity is **$1.7 billion** proforma for the closing of the expanded Credit Facility[10](index=10&type=chunk) - Full-year acquisition guidance was increased to approximately **$700 million** due to growing pipelines across all three external growth platforms[10](index=10&type=chunk) [Portfolio Overview](index=3&type=section&id=Portfolio%20Update) As of June 30, 2024, the company's portfolio of **2,202 properties** was **99.8% leased** with a weighted-average lease term of **8.1 years** [Portfolio Statistics](index=3&type=section&id=Portfolio%20Statistics) The portfolio consists of **2,202 properties** across **49 states**, totaling **45.8 million square feet** Portfolio Snapshot (as of June 30, 2024) | Metric | Value | | :--- | :--- | | Properties | 2,202 | | States | 49 | | Gross Leasable Area | 45.8 million sq. ft. | | Leased % | 99.8% | | Weighted-Average Remaining Lease Term | 8.1 years | | Annualized Base Rents from Investment Grade Tenants | 68.4% | [Ground Lease Portfolio](index=3&type=section&id=Ground%20Lease%20Portfolio) The ground lease portfolio, representing **11.3% of total annualized base rents**, is fully occupied with a **10.0-year weighted-average lease term** - The ground lease portfolio consists of **223 leases** and represents **11.3%** of the company's total annualized base rents[12](index=12&type=chunk) - The portfolio is **100% occupied**, has a weighted-average remaining lease term of approximately **10.0 years**, and generates **87.3%** of its annualized base rents from investment-grade retail tenants[12](index=12&type=chunk) [Top Tenants](index=6&type=section&id=Top%20Tenants) The portfolio's top tenants are primarily high-quality, national retailers, ensuring stable cash flows Top 5 Tenants by % of Annualized Base Rent | Tenant | % of Annualized Base Rent | | :--- | :--- | | Walmart | 5.8% | | Tractor Supply | 4.9% | | Dollar General | 4.7% | | Best Buy | 3.5% | | CVS | 3.3% | [Retail Sectors](index=7&type=section&id=Retail%20Sectors) The portfolio is diversified across various defensive and essential retail sectors Top 5 Retail Sectors by % of Annualized Base Rent | Sector | % of Annualized Base Rent | | :--- | :--- | | Grocery Stores | 9.6% | | Home Improvement | 9.2% | | Tire and Auto Service | 8.0% | | Convenience Stores | 8.0% | | Dollar Stores | 7.7% | [Geographic Diversification](index=8&type=section&id=Geographic%20Diversification) The company maintains a broad geographic footprint across **49 states**, reducing concentration risk Top 5 States by % of Annualized Base Rent | State | % of Annualized Base Rent | | :--- | :--- | | Texas | 7.1% | | Illinois | 5.6% | | Florida | 5.6% | | Ohio | 5.4% | | North Carolina | 5.4% | [Investment and Leasing Activity](index=3&type=section&id=Investment%20and%20Leasing%20Activity) The company was highly active in Q2, investing **$185.8 million** in acquisitions and commencing **$18.8 million** in new development projects [Acquisitions](index=3&type=section&id=Acquisitions) In Q2 2024, the company acquired **47 properties** for **$185.8 million** at a **7.7% weighted-average capitalization rate**, with **59.1% of acquired rent** from investment-grade tenants Q2 2024 Acquisition Summary | Metric | Value | | :--- | :--- | | Volume | ~$185.8 million | | Properties | 47 | | Weighted-Average Cap Rate | 7.7% | | Weighted-Average Remaining Lease Term | ~9.3 years | | % of ABR from Investment Grade Tenants | 59.1% | - The full-year 2024 acquisition volume outlook was increased to approximately **$700 million** from a previous **$600 million**[14](index=14&type=chunk) [Dispositions](index=4&type=section&id=Dispositions) The company strategically recycled capital by selling **10 properties** for **$36.9 million** in Q2 at a **6.4% weighted-average capitalization rate** - During Q2, the company sold **10 properties** for gross proceeds of approximately **$36.9 million** at a weighted-average capitalization rate of **6.4%**[15](index=15&type=chunk) - The full-year 2024 disposition guidance range was updated to **$60 million to $100 million**[15](index=15&type=chunk) [Development and DFP](index=4&type=section&id=Development%20and%20DFP) During Q2, **five new development or Developer Funding Platform (DFP) projects** were started with total committed capital of approximately **$18.8 million** - Commenced **five new development or DFP projects** in Q2 with total anticipated costs of approximately **$18.8 million**[16](index=16&type=chunk) H1 2024 Development & DFP Activity | Metric | Value | | :--- | :--- | | Projects Completed or Under Construction | 25 | | Anticipated Total Costs | ~$101.0 million | | Key Tenants | TJX Companies, Burlington, Starbucks, Gerber Collision, Sunbelt Rentals | [Leasing Activity and Expirations](index=5&type=section&id=Leasing%20Activity%20and%20Expirations) In Q2, the company proactively managed its portfolio by executing new leases, extensions, or options on approximately **302,000 square feet**, including a large Walmart Supercenter - Executed new leases, extensions, or options on approximately **302,000 square feet** of gross leasable area in Q2, including a **183,000-square foot Walmart Supercenter**[19](index=19&type=chunk) - As of June 30, 2024, lease maturities for the remainder of 2024 represented only **0.1% of annualized base rents**[19](index=19&type=chunk)[20](index=20&type=chunk) [Capital Structure and Liquidity](index=9&type=section&id=Capital%20Markets%2C%20Liquidity%20and%20Balance%20Sheet) The company significantly strengthened its balance sheet and liquidity position during the quarter [Capital Markets Activity](index=9&type=section&id=Capital%20Markets) In Q2, the company executed several strategic capital markets transactions, including a **$450 million public bond offering** of **5.625% senior unsecured notes due 2034** - Completed a **$450 million public bond offering** of **5.625% senior unsecured notes due 2034**[29](index=29&type=chunk) - Received commitments to increase its Credit Facility from **$1.0 billion to $1.25 billion** and extend the maturity to August 2029[30](index=30&type=chunk) - Entered into forward sale agreements via its ATM program to sell **3.2 million shares** for anticipated net proceeds of **$194.5 million**[31](index=31&type=chunk) [Liquidity and Balance Sheet](index=9&type=section&id=Liquidity%20and%20Balance%20Sheet) As of June 30, 2024, the company had over **$1.4 billion in liquidity**, which increases to approximately **$1.7 billion** proforma for the credit facility expansion - As of June 30, 2024, total liquidity was over **$1.4 billion**. Proforma for the closing of the expanded **$1.25 billion Credit Facility**, total liquidity is approximately **$1.7 billion**[33](index=33&type=chunk) Key Balance Sheet Metrics (as of June 30, 2024) | Metric | Value | | :--- | :--- | | Net Debt to Recurring EBITDA | 4.9x | | Proforma Net Debt to Recurring EBITDA | 4.1x | | Fixed Charge Coverage Ratio | 4.7x | | Total Debt to Enterprise Value | 29.6% | [Consolidated Financial Statements (Unaudited)](index=12&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) This section provides the unaudited consolidated financial statements for the period ended June 30, 2024, including the Balance Sheet, Statement of Operations, and reconciliations of GAAP Net Income to non-GAAP measures like FFO, Core FFO, and AFFO [Consolidated Balance Sheet](index=12&type=section&id=Consolidated%20Balance%20Sheet) As of June 30, 2024, the company reported total assets of **$8.00 billion**, up from **$7.77 billion** at year-end 2023 Key Balance Sheet Figures ($ in thousands) | Account | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Net real estate investments | $6,952,629 | $6,743,320 | | Total Assets | $8,000,838 | $7,774,836 | | Total Liabilities | $2,837,760 | $2,574,683 | | Total Equity | $5,163,078 | $5,200,153 | [Consolidated Statements of Operations and Comprehensive Income](index=13&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) For the three months ended June 30, 2024, the company generated total revenues of **$152.6 million**, a significant increase from **$129.9 million** in the prior-year period Key Income Statement Figures - Q2 ($ in thousands) | Account | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Total Revenues | $152,575 | $129,900 | | Income from Operations | $81,967 | $61,629 | | Net Income Attributable to Common Stockholders | $52,865 | $39,009 | | Diluted Net Income Per Share | $0.52 | $0.42 | [Reconciliation of Net Income to FFO, Core FFO and Adjusted FFO](index=15&type=section&id=Reconciliation%20of%20Net%20Income%20to%20FFO%2C%20Core%20FFO%20and%20Adjusted%20FFO) For Q2 2024, Net Income of **$54.9 million** was reconciled to key non-GAAP performance metrics: Funds from Operations (FFO) of **$95.8 million**, Core FFO of **$104.2 million**, and Adjusted Funds from Operations (AFFO) of **$105.3 million** Reconciliation to AFFO - Q2 2024 ($ in thousands) | Metric | Amount | | :--- | :--- | | Net Income | $54,913 | | Adjustments (Depreciation, Amortization, etc.) | +$40,920 | | **Funds from Operations (FFO)** | **$95,833** | | Amortization of lease intangibles, net | +$8,381 | | **Core Funds from Operations (Core FFO)** | **$104,214** | | Adjustments (Straight-line rent, Stock comp, etc.) | +$1,094 | | **Adjusted Funds from Operations (AFFO)** | **$105,308** | [Reconciliation of Non-GAAP Financial Measures](index=17&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This reconciliation details the calculation of key leverage and performance metrics Net Debt and Recurring EBITDA Calculation - Q2 2024 ($ in thousands) | Metric | Amount | | :--- | :--- | | Total Debt | $2,697,393 | | Less: Cash and cash equivalents | ($24,254) | | **Net Debt** | **$2,673,139** | | EBITDAre | $125,611 | | Adjustments for Run-Rate & Amortization | +$10,187 | | **Recurring EBITDA** | **$135,798** | | **Annualized Recurring EBITDA** | **$543,192** |

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Mark One ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2024, or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number 001-12928 AGREE REALTY CORPORATION (Exact name of registrant as specified in its charter) | --- | --- | |----------- ...

8vFanI/iStock via Getty Images Introduction Since the latest CPI report, the market has been enthusiastic about interest rate cuts in the near future. One sector that has reacted positively to the news is one that I have been beating the drum on for over a year, the REIT sector (XLRE). With higher for longer interest rates negatively impacting their share prices the past two years, many were trading at or below their pandemic lows, creating a great buying opportunity for investors. Additionally, this al ...

These two dividend growth stocks offer you at least double what you get from the S&P 500, all backed by very boring businesses.The problem with dividend growth stocks is that investors often afford them a premium valuation. Given the dividend yield equation, that basically translates to a lower yield. However, the stock market is near all-time highs right now, so the yield on the S&P 500 is disappointingly hovering at a little less than 1.3%. You can do much better than that with dividend growers like Agree ...