After 24 consecutive annual dividend increases, W.P. Carey (WPC 1.81%) did something that seemed unthinkable -- it cut its dividend by 20%. That decision, which was made in 2023 but impacted the first dividend in 2024, has resulted in dividend investors avoiding this net lease real estate investment trust (REIT).That could be a buying opportunity if you have $1,000 or $100,000 to invest right now. Here's what you need to know.What did W.P. Carey do?At its core, W.P. Carey uses the fairly simple net lease ap ...

Core Viewpoint - W.P. Carey is currently undervalued, offering a 6.6% yield despite a 40% decline in share price since 2019, making it an attractive option for passive income seekers [1][3]. Group 1: Stock Price Pressure - W.P. Carey faced stock price pressure due to its decision to spin off its office segment in late 2023, which led to a reduction in dividend payouts [3][4]. - The company’s dividend was lowered by 19.7% to $0.86 per share in 2023, contributing to investor caution [9]. - Rising Treasury yields, which increased by 27.9% since mid-September 2023, have made reliable dividend stocks like W.P. Carey less attractive [5][6]. Group 2: Financial Performance - In Q3 2024, W.P. Carey reported adjusted funds from operations (FFO) of $1.18 per share, only 12% lower than the previous year [8]. - The REIT raised its dividend payout four times in 2024 to $0.88 per share, indicating a recovery and potential for future increases [9][10]. - The company invested $1.6 billion in 2024 into single-tenant warehouse and industrial properties, which is expected to enhance future FFO [10][11]. Group 3: Investment Outlook - W.P. Carey is positioned to support future dividend increases due to sufficient earnings and a growing portfolio [11]. - The current high yield makes it a compelling option for income-seeking investors, even with a slower growth rate [12].

Shares of W.P. Carey (WPC -1.64%) declined 15.9% in 2024, according to data from S&P Global Market Intelligence. That significantly underperformed the S&P 500, which gained 23.3% on the year. Here's a look at what weighed on the diversified REIT last year and whether it can bounce back in 2025.Tearing down to build back betterW.P. Carey made a major strategy shift in late 2023. The REIT decided to exit the challenging office sector by spinning off and selling its office portfolio. As a result of that move a ...

Portfolio Acquisitions and Investments - The company spent $200 million to acquire 106 discount retail properties across 21 states, leased to Dollar General, with a weighted-average remaining lease term of 14.3 years and built-in rent escalation [1] - It plans to purchase nine additional stores in Q1 2024 for around $20 million [1] - The company acquired a 1.1 million-square-foot U.S. battery factory leased to Canadian Solar for $100 million, with a 12.4-year NNN lease and rent escalation clause [1] - It completed a $100 million sale-leaseback of a five-building manufacturing and industrial campus in Mexico, totaling 1.1 million square feet, with a 25-year NNN lease and rent escalators [1] - The company purchased a 209,000-square-foot U.S. data center leased to a Brookfield Infrastructure subsidiary for $100 million, with an 11.1-year NNN lease and rent escalators [1] Portfolio Restructuring and Strategy - The company spent much of 2023 remodeling its portfolio by removing offices and non-core properties, allowing it to upgrade to higher-quality properties with better long-term prospects [3] - It exited the office sector and sold off other non-core properties, using the proceeds to invest $1.6 billion in new properties [5] - The company focused on industrial real estate (60% of investment volume) and retail properties (30%), with 75% of investments in North America and 25% in Europe [8] - It achieved a strong initial real estate cap rate of 7.5%, with an average yield of around 9% when factoring in rent growth over the lease terms [8] Financial Performance and Dividend Growth - The company raised its dividend four times in 2023, with a current yield of nearly 6.5%, and is poised for further growth in 2025 due to new investments and growth drivers [6] - It ended 2024 with a total investment volume of $1.6 billion, within its guidance range of $1.25 billion to $1.75 billion, and a record Q4 investment volume of $845 million [7] - The company's strong finish in 2024 positions it to grow its adjusted funds from operations (FFO) and dividend in 2025, supported by best-in-class rent escalation [9] Liquidity and Future Investment Potential - The company has substantial liquidity from selling off its office portfolio and other non-core properties, enabling it to continue making accretive acquisitions without issuing additional stock [2][10] - It holds other non-core properties, including 78 self-storage centers, four hotels, and two student housing properties, as well as a stake in cold storage REIT Lineage Logistics, which could be liquidated [11] - The company is well-positioned to continue making investments in 2025, leveraging its strong liquidity and portfolio restructuring efforts [10]

Includes Record Fourth-Quarter Investment Volume of $845 Million NEW YORK, Jan. 8, 2025 /PRNewswire/ -- W. P. Carey Inc. (W. P. Carey, NYSE: WPC), a leading net lease REIT specializing in corporate sale-leasebacks, build-to-suits and the acquisition of single-tenant net lease properties, today announced investment volume for the 2024 full year of approximately $1.6 billion at a weighted-average initial cap rate of approximately 7.5% and an average yield of approximately 9% (which reflects contractual rent e ...

W. P. Carey (NYSE: WPC ) is likely a REIT that needs no introduction. The company angered many investors when they raised and quickly cut the dividend in late 2023 from $1.07 to $0.86.Contributing analyst to the iREIT+Hoya Capital investment group. The Dividend Collectuh is not a registered investment professional nor financial advisor and these articles should not be taken as financial advice. This is for educational purposes only and I encourage everyone to do their own due diligence. I'm a Navy veteran w ...

Founded in 1973, W. P. Carey (NYSE: WPC ) is one of the largest net lease REITs that focuses on investing for the long run , as stated on the front page of its own website. The companyI'm Luuk Wierenga, an economics teacher from the Netherlands with a strong focus on income investing. My investment journey began during COVID-19, and since then, I've specialized in identifying high-yield Real Estate Investment Trusts (REITS) that provide stable passive income. As an educator, I apply fundamental economic ins ...

Core Viewpoint - W. P. Carey (NYSE: WPC) has experienced a decline of 12% in value in 2024, indicating a challenging year for the company [1]. Group 1 - The investment in W. P. Carey has not performed well, with a significant loss as the year approaches its end [1]. - The focus of the investment strategy includes high-risk, high-reward situations, particularly in technology markets, with notable holdings in Bitcoin, Tesla, Google, Amazon, and Nvidia [1].

Core Viewpoint - W. P. Carey has successfully transitioned its portfolio and financial profile, leading to a stronger foundation for future growth and dividend increases after a challenging period in the office sector [1][3][10] Portfolio Restructuring - The company has sold or spun off its entire office portfolio and several other properties, including self-storage assets, to focus on a more conservative investment strategy [3][6] - As of mid-2023, the portfolio mix included 29% industrial, 24% warehouse, 16% office, 17% retail, and 4% self-storage, which has since shifted to 35% industrial, 28% warehouse, 22% retail, and 15% in other categories [3][4] Financial Metrics - The dividend payout ratio has been reduced from over 80% to a target range of 70%-75%, allowing for greater cash retention for new investments [3] - The leverage ratio has improved from 5.7x to 5.4x, providing additional investment capacity [3] Dividend Growth - W. P. Carey has increased its dividend every quarter in 2024, raising the quarterly rate from $0.86 per share to $0.88 per share, marking a 2.3% year-over-year increase [5] - The company anticipates continued dividend increases supported by a stronger financial profile and portfolio [9][10] Investment Activity - The company sold $1.2 billion in assets over the past year, with expectations to increase this to $1.3 billion-$1.5 billion by year-end through additional noncore property sales [6] - By the end of October, W. P. Carey had made $971.4 million in investments, including significant acquisitions in the industrial and warehouse sectors [7] Future Outlook - W. P. Carey expects to continue growing its portfolio next year, leveraging post-dividend free cash flow and debt capacity to make accretive acquisitions without needing to sell stock [9] - The company is projected to close around $1.5 billion in new investments this year, with over $500 million in additional deals in the pipeline [8]

Core Insights - The article emphasizes the importance of conducting personal in-depth research and due diligence before making investment decisions, highlighting the inherent risks involved in trading [3]. Group 1 - The analysis is intended solely for informational purposes and should not be interpreted as professional investment advice [3]. - There is a clear disclaimer regarding the lack of any stock, option, or derivative positions in the companies mentioned, indicating a neutral stance [2]. - The article expresses that past performance does not guarantee future results, underscoring the unpredictability of investments [4].