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For the quarter ended September 2024, Essential Properties (EPRT) reported revenue of $117.13 million, up 27.8% over the same period last year. EPS came in at $0.43, compared to $0.29 in the year-ago quarter.The reported revenue represents a surprise of +2.28% over the Zacks Consensus Estimate of $114.52 million. With the consensus EPS estimate being $0.44, the EPS surprise was -2.27%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to ...

Essential Properties (EPRT) came out with quarterly funds from operations (FFO) of $0.43 per share, missing the Zacks Consensus Estimate of $0.44 per share. This compares to FFO of $0.42 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an FFO surprise of -2.27%. A quarter ago, it was expected that this company would post FFO of $0.43 per share when it actually produced FFO of $0.43, delivering no surprise.Over the last four quarters, the company has n ...

Portfolio Overview - As of September 30, 2024, the company had a portfolio of 2,053 properties with an annualized base rent of $438.0 million, achieving a 99.9% occupancy rate[197]. - The occupancy level of the portfolio is high at 99.9% as of September 30, 2024, with only three properties vacant, significantly less than 1% of the portfolio[227]. - The company’s real estate investment portfolio consisted of 2,053 properties with an annualized base rent of $438.0 million as of September 30, 2024[260]. - The company operates 2,053 properties across 49 states, with Texas contributing the highest annualized base rent of $56,750,000, accounting for 13.0% of the total[269]. - The total square footage of all properties is 21,037,576 sq. ft., with an average rent per square foot of $20.92[269]. Lease and Rent Details - 93.2% of the annualized base rent was attributable to properties operated by tenants in service-oriented and experience-based businesses[197]. - The weighted average remaining lease term was 14.1 years, with only 3.9% of annualized base rent expiring before January 1, 2029[199]. - 98.6% of leases provided for future base rent increases at a weighted average rate of 1.7% per year[200]. - The portfolio's weighted average rent coverage ratio was 3.6x, with 99.0% of leases requiring periodic tenant financial reporting[202]. - 96.4% of leases were triple-net, reducing potential capital expenditures related to operating expenses[262]. - The five largest tenants had a rent coverage ratio of 6.5x, indicating strong financial health[262]. Investment Strategy - The company aims to maximize stockholder value through disciplined underwriting and risk management strategies[211]. - The management team has significant experience in the net-lease industry, supporting the company's growth and investment strategies[208]. - The company emphasizes investments in service-oriented or experience-based businesses, which are generally more insulated from e-commerce pressure[219]. - 89% of investments during the three months ended September 30, 2024, were sale-leaseback transactions[199]. - The company plans to continue disciplined growth by originating sale-leaseback transactions, with 91.8% of the portfolio's annualized base rent attributable to internally originated transactions as of September 30, 2024[217]. Financial Performance - Total revenues for the three months ended September 30, 2024, reached $117.13 million, an increase of $25.48 million compared to $91.66 million in the same period of 2023[276]. - Rental revenue increased by $23.5 million, or 27.1%, to $110.5 million for the three months ended September 30, 2024, compared to $86.97 million in the same period of 2023[276]. - Net income attributable to stockholders for the three months ended September 30, 2024, was $49.14 million, an increase of $3.23 million compared to $45.91 million in the same period of 2023[276]. - Funds from Operations (FFO) attributable to stockholders and non-controlling interests for the three months ended September 30, 2024, was $86,070,000, up from $70,580,000 in 2023, indicating a 22% growth[304]. - Cash NOI attributable to stockholders and non-controlling interests for the three months ended September 30, 2024, was $105,171,000, compared to $83,815,000 in 2023, reflecting a 25.5% increase[314]. Debt and Financing - As of September 30, 2024, total principal outstanding debt was $2.21 billion, an increase from $1.68 billion as of December 31, 2023, with a weighted average interest rate of 4.2%[239]. - The company has a Revolving Credit Facility of up to $600 million, maturing on February 10, 2026, with two six-month extension options[240]. - All long-term debt as of September 30, 2024, was fixed-rate or effectively converted to fixed-rate, with a weighted average debt maturity of 4.3 years[234]. - The company issued $400 million of senior unsecured notes due July 2031, with a fixed interest rate of 2.95%[250]. - The company is subject to customary restrictive covenants under its credit agreements, including maintaining certain leverage and cash flow ratios[244]. Impairment and Expenses - Provision for impairment of real estate surged to $5.7 million for the three months ended September 30, 2024, compared to only $165,000 in the same period of 2023, reflecting a significant increase in impairment charges[281]. - General and administrative expenses increased by $1.45 million, or 20.2%, to $8.62 million for the three months ended September 30, 2024, primarily due to higher salary expenses and professional fees[280]. - Interest expense increased by $9 million, or 71.2%, to $21.63 million for the three months ended September 30, 2024, attributed to a higher outstanding debt balance and increased interest rates[284]. Future Outlook - The company plans to manage long-term debt maturities to avoid significant amounts maturing in any single year[234]. - The company has access to various future sources of debt capital, including public issuances and mortgage financing, to diversify funding sources[236]. - The company must distribute at least 90% of its REIT taxable income to maintain its REIT status, limiting reliance on retained earnings for business needs[232].

Exhibit 99.1 Essential Properties Announces Third Quarter 2024 Results - Third Quarter Net Income per Share of $0.27 and AFFO per Share of $0.43 - - Closed Investments of $307.6 million at an 8.1% Weighted Average Cash Cap Rate - - Issues 2025 AFFO Guidance of $1.84 to $1.89 per Share - October 23, 2024 PRINCETON, N.J.--(BUSINESS WIRE)--Essential Properties Realty Trust, Inc. (NYSE: EPRT; "Essential Properties" or the "Company") today announced operating results for the three and nine months ended September ...

Core Insights - Essential Properties (EPRT) is expected to report quarterly earnings of $0.44 per share, reflecting a year-over-year increase of 4.8% [1] - Anticipated revenues are projected to be $114.52 million, showing a significant increase of 24.9% compared to the same quarter last year [1] - The consensus EPS estimate has been revised downward by 0.5% in the past 30 days, indicating a reassessment by analysts [1] Revenue Estimates - Analysts project 'Revenues- Interest on loans and direct financing lease receivables' to reach $4.88 million, representing a year-over-year change of +6.8% [2] - The estimate for 'Revenues- Rental revenue' is expected to be $108.01 million, indicating a year-over-year change of +24.2% [2] - 'Depreciation and amortization' is anticipated to be $30.87 million, up from $26.21 million reported in the same quarter last year [2] Stock Performance - Shares of Essential Properties have shown a return of -1.7% over the past month, contrasting with the Zacks S&P 500 composite's +2.8% change [3] - With a Zacks Rank 3 (Hold), EPRT is expected to perform in line with the overall market in the near future [3]

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Article Overview - The article discusses the author's experience with dividend investing and their coverage of Essential Properties Realty Trust (EPRT) on Seeking Alpha [1] - The author emphasizes the importance of dividend investing as a path to financial freedom and shares insights from their professional background in finance, M&A, and business valuation [1] Author's Background and Expertise - The author is a finance professional with deep experience in M&A and business valuation, having evaluated numerous businesses and participated in sell-side and buy-side transactions [1] - Their expertise spans sectors such as tech, real estate, software, finance, and consumer staples, which form the core of their personal investment portfolio and coverage on Seeking Alpha [1] Dividend Investing Philosophy - Dividend investing is highlighted as a straightforward and accessible way to achieve financial freedom, with the author sharing their personal journey and insights to make the process more approachable for others [1] - The author's motivation for writing on Seeking Alpha is to deepen their own knowledge and share value with others pursuing similar financial goals [1] Disclosure and Position - The author holds a beneficial long position in EPRT through stock ownership, options, or other derivatives [2] - The article reflects the author's personal opinions and is not influenced by compensation or business relationships with the mentioned companies [2] General Disclaimer - The article does not constitute investment advice or recommendations, and the author owns other REITs such as ADC, O, and NNN [3] - Seeking Alpha's disclosure clarifies that the platform and its analysts are not licensed securities dealers, brokers, or investment advisers, and the views expressed may not reflect those of Seeking Alpha as a whole [3]

Core Viewpoint - Essential Properties Realty Trust (EPRT) is positioned as a compelling investment alternative in the retail REIT sector, focusing on mid-market properties and smaller tenants, which allows for higher growth potential despite associated risks [1][19]. Group 1: Company Overview - EPRT specializes in retail properties, particularly in the experience and services sectors, differentiating itself from larger peers like Realty Income Corp. and NNN REIT by targeting smaller, non-investment grade tenants [1]. - The REIT has a total of 2,009 properties and 395 tenants, with an impressive occupancy rate of 99.9% since its IPO, indicating strong demand and effective management [4]. - EPRT's portfolio is diversified across 16 industries and 49 states, with a significant focus on services, which constitute 80.3% of its annual base rent (ABR) [5][6]. Group 2: Financial Performance - In Q2, EPRT reported a funds from operations (FFO) per share of $1.84, maintaining consistent growth in both FFO and dividends per share since its IPO in 2018 [2][3]. - The REIT has demonstrated a controlled payout ratio, with a dividend per share of $1.14 and a dividend payout ratio of 0.95, reflecting a healthy balance between growth and returns [3][16]. - EPRT's average cash cap rate for acquisitions in Q2 2024 was 8%, significantly higher than larger REITs, indicating its ability to secure more profitable investment opportunities [11]. Group 3: Investment Strategy - EPRT employs a strategy focused on sale-leaseback transactions, which typically involve long-term contracts and enhance tenant quality, contributing to predictable cash flows [11]. - The REIT's focus on tenants with lower credit ratings allows it to capture a risk premium, with 38.4% of its portfolio under long-term contracts expiring after 2039 [7][10]. - EPRT has invested over $195 million per quarter since Q1 2022, indicating a proactive approach to growth and expansion in a less competitive market [10][19]. Group 4: Valuation and Growth Prospects - EPRT is currently trading at a price-to-FFO ratio of 17.3x, higher than its peers, reflecting its growth potential and lower leverage [14][15]. - The projected annualized FFO per share growth for 2024 is 5.5%, which is favorable compared to Realty Income's 4.4% and NNN's 2.6% [15]. - EPRT's dividend yield stands at 3.56%, the lowest among major retail REITs, but its payout is considered the healthiest based on net income, suggesting room for future increases [16][18].

IvelinRadkov My initial bull thesis on Essential Properties Realty Trust, Inc. (NYSE:EPRT) was circulated back in September 2023. At the time, the P/FFO multiple of 13x seemed just too low given the robust balance sheet, ample liquidity, and conservative cash flows. My view was that by opening a position in EPRT, investors would access sizeable returns from price appreciation on top of an attractive and well-supported dividend of ~5%. In the total return performance chart below, we can see how EPRT has deli ...