Group 1 - The investment approach has received over 500 five-star reviews from members, indicating high satisfaction and perceived benefits [1] - The company invests significant resources, over $100,000 annually, into researching profitable investment opportunities, particularly in real estate strategies [1] - The leader of the investing group, High Yield Landlord, shares real-time transactions and maintains three distinct portfolios: core, retirement, and international [2] Group 2 - Jussi Askola, the President of Leonberg Capital, is recognized for his expertise in REIT investing and has authored award-winning academic papers on the subject [2] - The investing group offers features such as buy/sell alerts and direct access to analysts for member inquiries [2]

Group 1 - Essential Properties (NYSE: EPRT) has been recognized for its stable tenant portfolio, which focuses on long-term leases [1] - The investment thesis emphasizes the attractiveness of high-quality stocks and businesses led by disciplined capital allocators [1] Group 2 - The company is noted for its ability to generate exceptional returns on capital and compound invested capital over extended periods [1]

Core Viewpoint - Essential Properties Realty Trust (EPRT) is highlighted as a strong option for investors seeking a reliable passive income stream through real estate investment trusts (REITs) [2][12] Company Overview - Essential Properties Realty Trust owns over 2,100 properties leased to 413 tenants across 16 industries in 49 states [3] - The REIT's top tenant, Equipment Share, contributes 4.2% of its annual base rent, while the top 10 tenants account for 17.6% of the total rent [3] Lease Structure - The REIT signs long-term net leases with a weighted average remaining lease term of 14 years, ensuring stable rental income as tenants cover all operating expenses [4] - Nearly 97% of its leases have a low fixed annual escalation rate of 1.7%, leading to steadily rising rental income [4] Financial Profile - Essential Properties maintains a conservative financial profile with a low leverage ratio of 3.8 times and an investment-grade rated balance sheet (BBB/BBB-) [7] - The REIT pays out about two-thirds of its stable cash flow in dividends, which is conservative compared to Realty Income's 74.6% payout ratio [5][6] Dividend Growth - The REIT has consistently increased its dividend every year since going public in 2018, providing investors with approximately 2% raises every six months [9] - Essential Properties has a lower dividend yield of 3.6% compared to Realty Income's 5.5%, but retains $120 million in excess free cash flow annually for further investments [6] Property Types - Service-related properties make up 79% of the REIT's annual base rent, while experience-related properties account for 13.5%, retail properties for 3.3%, and industrial properties for 3.5% [10]

Group 1 - Samuel Smith has extensive experience in dividend stock research and investment, having served as lead analyst and Vice President at notable firms [1] - He is a Professional Engineer and Project Management Professional with degrees in Civil Engineering & Mathematics and a Master's in Engineering focused on applied mathematics and machine learning [1] - Samuel leads the High Yield Investor investing group, collaborating with Jussi Askola and Paul R. Drake to balance safety, growth, yield, and value in investment strategies [2] Group 2 - High Yield Investor provides real-money core, retirement, and international portfolios, along with regular trade alerts and educational content for investors [2] - The service includes an active chat room for like-minded investors to share insights and strategies [2]

Core Insights - Essential Properties Realty Trust (NYSE: EPRT) is positioned as a strong player in the retail/service-oriented real estate sector, although it does not enjoy the same level of popularity as Realty Income (O), NNN REIT (NNN), or Agree Realty (ADC) [1] Company Overview - The company focuses on dividend investing, which is highlighted as a key strategy for achieving financial freedom [1] - The author emphasizes the importance of financial modeling, commercial and financial due diligence, and negotiation in assessing the health of companies within the real estate sector [1] Investment Strategy - Dividend investing is presented as an accessible path for individuals seeking to build long-term wealth [1] - The insights shared aim to demystify the investment process, making it more approachable for those interested in dividend investing [1]

Core Viewpoint - The Zacks REIT and Equity Trust - Retail industry is facing challenges due to e-commerce growth, fiscal and trade policies, and changing consumer spending patterns, which may lead to high interest rates negatively impacting retail REITs [1][4]. Industry Overview - The industry includes REITs that own, develop, manage, and lease various retail properties, with performance significantly influenced by economic conditions, employment levels, and consumer spending trends [3]. - The industry is experiencing a rebound driven by renewed consumer interest in in-store shopping, despite past challenges such as declining foot traffic and store closures [3]. Market Dynamics - Macroeconomic uncertainty and tariff impacts present risks to the retail real estate market, with potential fluctuations in consumer spending due to economic volatility [4]. - The rise of e-commerce is challenging brick-and-mortar retailers, leading to downsizing and consolidation of physical stores, particularly in sectors like apparel and electronics [5]. Consumer Trends - A resilient consumer environment and limited new construction support stable demand, with high-quality locations outperforming [2]. - Experiential retail is expected to play a significant role in revitalizing retail real estate by enhancing customer experience through entertainment and interactive features [6]. Performance Metrics - The Zacks REIT and Equity Trust - Retail industry has underperformed the broader Zacks Finance sector and the S&P 500, advancing only 6.6% over the past year compared to the S&P 500's 24.1% [11]. - The industry is currently trading at a forward 12-month price-to-FFO of 16.37X, below the S&P 500's forward P/E of 22.71X and the Finance sector's 17.38X [13]. Company Highlights - Essential Properties Realty Trust, Inc. (EPRT) focuses on single-tenant properties leased to service-oriented businesses, with a weighted average lease term of 14 years and a projected FFO per share growth of 8.6% year-over-year for 2025 [16][18]. - Urban Edge Properties (UE) operates in densely populated regions, with 75% of its portfolio value grocery-anchored, ensuring stable cash flows and a projected FFO per share growth of 3.7% year-over-year for 2025 [19][21].

Financial Data and Key Metrics Changes - The company reported an AFFO per share of $0.45, a 7% increase compared to Q4 2023, with total AFFO reaching $81.8 million, up $14.8 million or 22% year-over-year [21][22]. - General and administrative expenses (G&A) increased to $8.5 million from $7.3 million in Q4 2023, but recurring cash G&A as a percentage of total revenue improved to 4.8% from 5.2% [22][23]. - The company declared a cash dividend of $0.295, resulting in an AFFO payout ratio of 66% [23]. Business Line Data and Key Metrics Changes - The company signed 72 leases in Q4 2024 with a recapture rate of 101%, significantly up from 22 leases at a 79% recapture rate in 2023 [12][13]. - Same-store rent growth was reported at 1.4%, with an occupancy rate of 99.7% and collections at 100% [12][19]. Market Data and Key Metrics Changes - The company ended the quarter with properties leased to 413 tenants across 16 industries, maintaining a weighted average lease term of 14 years [11][12]. - The weighted average unit-level rent coverage ratio was 3.5 times, indicating strong profitability and cash flow generation by tenants [12][16]. Company Strategy and Development Direction - The company aims to continue supporting tenant relationships and investing in core industries, with an updated investment guidance of $900 million to $1.1 billion for 2025 [10][11]. - The investment pipeline remains robust, with a focus on middle-market operators, which is seen as a key differentiator and risk mitigation strategy [18][19]. Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business prospects, citing strong portfolio trends and a favorable investment environment for 2025 [10][30]. - The company acknowledged increased competition in the market, leading to modest cap rate compression, but remains confident in its ability to transact favorably [10][42]. Other Important Information - The company sold 24 properties for $60.4 million in net proceeds during Q4, primarily in the car wash sector, reducing exposure in that industry to 14.2% of ABR [19][20]. - The company has a solid liquidity position with a pro forma net debt to annualized adjusted EBITDAre of 3.8 times and a recently amended $2.3 billion senior unsecured credit facility [27][28]. Q&A Session Summary Question: Can you elaborate on the Zips bankruptcy and the car wash segment? - Management indicated that they are in negotiations regarding Zips and feel well-positioned with reduced exposure to three properties, representing only 20 basis points of ABR [35][36]. Question: What are your thoughts on the increased competition in the market? - Management noted increased competition from peers and new entrants, leading to modest cap rate compression, but the transaction environment remains favorable [42][44]. Question: How has interest rate volatility impacted your business? - Management stated that their transaction cycle insulates them from short-term interest rate volatility, and they expect downward pressure on cap rates [50][52]. Question: Can you provide insights on your dispositions in Q4? - The company focused on portfolio management and risk management, particularly reducing car wash exposure, and expects disposition activity to moderate in 2025 [56][57]. Question: What is the outlook for acquisition volume in 2025? - Management expressed conservatism in their acquisition guidance for 2025, reflecting a normalization of capital markets and expected cap rate declines [96][97].

Core Insights - Essential Properties (EPRT) reported a revenue of $119.71 million for Q4 2024, marking a year-over-year increase of 22.5% and an EPS of $0.45 compared to $0.31 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $120.68 million by 0.81%, while the EPS met the consensus estimate [1] Financial Performance Metrics - Interest on loans and direct financing lease receivables generated $7.33 million, exceeding the average estimate of $6.49 million by analysts, reflecting a year-over-year increase of 60.1% [4] - Rental revenue was reported at $112.36 million, slightly below the estimated $112.84 million, but still showing a 20.9% increase compared to the previous year [4] - Other revenue was reported at $0.02 million, significantly lower than the estimated $0.18 million, indicating a year-over-year decline of 92.2% [4] - Diluted net income per share was $0.30, slightly below the average estimate of $0.32 from two analysts [4] Stock Performance - Shares of Essential Properties have returned +0.7% over the past month, while the Zacks S&P 500 composite has increased by +4.3% [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential outperformance against the broader market in the near term [3]

分组1 - Essential Properties (EPRT) reported quarterly funds from operations (FFO) of $0.45 per share, matching the Zacks Consensus Estimate, and an increase from $0.42 per share a year ago [1] - The company posted revenues of $119.71 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 0.81%, but showing growth from $97.73 million year-over-year [2] - The stock has underperformed the market with a loss of about 0.3% since the beginning of the year, compared to the S&P 500's gain of 3.2% [3] 分组2 - The current consensus FFO estimate for the upcoming quarter is $0.46 on revenues of $125.74 million, and for the current fiscal year, it is $1.88 on revenues of $517.9 million [7] - The Zacks Industry Rank for REIT and Equity Trust - Retail is in the top 33% of over 250 Zacks industries, indicating a favorable outlook for the industry [8] - Essential Properties has a Zacks Rank 2 (Buy), suggesting that the shares are expected to outperform the market in the near future [6]

Financial Performance - The company's net income for the year ended December 31, 2024, was $203.6 million, with an EBITDAre of $410.8 million and an Annualized Adjusted EBITDAre of $451.7 million[42]. - The company declared quarterly distributions totaling $1.16 per share of common stock for the year ended December 31, 2024[30]. - The company may be unable to maintain current distribution levels if sufficient cash is not available, potentially leading to a decrease in stock price[166]. - Future distributions depend on various factors including actual and projected operating results, FFO, Core FFO, AFFO, and liquidity[167]. - The market price of the company's common stock has experienced significant volatility, which may lead to a decrease in share value unrelated to operating performance[164]. Portfolio Overview - As of December 31, 2024, the total annualized base rent was $460.6 million, with 93.2% attributable to properties operated by tenants in service-oriented and experience-based businesses[19]. - The portfolio consisted of 2,104 properties, with a weighted average remaining lease term of 14.0 years, and 99.7% occupancy across 413 tenants operating 592 different concepts[20][21]. - The average investment per property was $2.9 million, focusing on smaller, low basis single-tenant properties[23]. - The portfolio was 99.7% occupied, with leases contributing 98.4% of annualized base rent providing for annual increases ranging from 1.0% to 4.0%[42]. - The company sold 46 properties for net sales proceeds of $94.2 million during the year ended December 31, 2024[48]. Investment Strategy - In 2024, the company completed $1.2 billion of investments in 297 properties, including $138.5 million in newly originated mortgage loans receivable[30]. - 97.2% of new investments in real estate were attributable to internally originated sale-leaseback transactions[49]. - The company emphasizes investment in properties leased to middle-market companies, which are often underserved from a capital perspective[50]. - The company targets a net debt level of less than six times its Annualized Adjusted EBITDAre, but this ratio may exceed that target at times[137]. Debt and Liquidity - As of December 31, 2024, liquidity totaled $1.0 billion, including $45.0 million in cash and cash equivalents[31]. - As of December 31, 2024, the company had $2.1 billion of gross debt outstanding, with a net debt to Annualized Adjusted EBITDAre ratio of 4.6x[42]. - The company had $2.1 billion of outstanding indebtedness, consisting of $1.7 billion in term loans and $400 million in senior unsecured notes[119]. - The company has 39 interest rate swap agreements with a total notional amount of $1.7 billion, aimed at hedging interest rate risks[125]. Tenant and Lease Information - 66.1% of annualized base rent was attributable to master leases, which spread investment risk across multiple properties[26]. - 98.4% of leases provided for future base rent increases at a weighted average rate of 1.7% per year, offering protection against inflation[27]. - The company's five largest tenants contributed 10.7% of annualized base rent, while the ten largest contributed 17.6%, indicating potential risk if any of these tenants face financial difficulties[84]. - Approximately 84.3% of annualized base rent comes from tenants in service-oriented or experience-based industries, which are sensitive to consumer discretionary spending[88]. Risk Factors - Adverse changes in U.S. and global markets may impact tenants' ability to make rental payments, affecting the company's growth and profitability[77]. - The company is exposed to significant risks from single-tenant leases, where the default of a single tenant can lead to substantial revenue loss[81]. - Economic conditions and inflation may adversely affect tenants' operating expenses, impacting their ability to pay rent[91]. - The company acknowledges that future environmental legislation may impose additional liabilities, which could materially and adversely affect its operations[71]. Environmental, Social, and Governance (ESG) Initiatives - The Board actively oversees Environmental, Social, and Governance (ESG) initiatives, integrating ESG performance metrics into executive compensation to align with long-term sustainability goals[59]. - The company aims to reduce its carbon footprint by implementing sustainability upgrades at corporate offices and income properties[60]. - The company plans to publish its 2024 Corporate Responsibility Report, aligned with the Sustainability Accounting Standards Board and the Financial Stability Board Task Force on Climate-related Financial Disclosure indices[62]. - The company conducts environmental assessments before property acquisitions to identify potential environmental concerns, adhering to established standards[69]. Cybersecurity Measures - The company is committed to enhancing its cybersecurity risk management program, including third-party expert involvement for system penetration testing[62]. - The company conducts annual cybersecurity risk assessments with external consultants to enhance security controls[188]. - The cybersecurity program includes comprehensive incident response and recovery plans that are periodically tested[190]. - The Board oversees cybersecurity risk management, receiving periodic reports on material security risks[195]. Legal and Regulatory Compliance - The company is subject to various legal proceedings, but management does not expect any material adverse effects on business operations or financial condition[214]. - Compliance with regulations such as the Americans with Disabilities Act may require unanticipated expenditures, impacting financial performance[112]. - Changes in tax laws applicable to REITs could adversely affect the company's tax treatment and impact investors[162].