Is it Wise to Retain W.P. Carey Stock in Your Portfolio Now?

W.P. Carey WPC is well-poised to benefit from its high-quality, single-tenant, mission-critical, diversified portfolio. Its specialty in long-term sale-leaseback transactions with contractual rental bumps leads to steady revenue generation. Strategic portfolio repositioning efforts appear promising. A solid balance sheet aids future growth endeavors. However, macroeconomic uncertainty and tenant bankruptcy woes are its concerns.What’s Aiding WPC?W.P. Carey has one of the largest portfolios of single-tenant net lease commercial real estate in the United States and Northern and Western Europe. The company invests in high-quality assets that are mission-critical for its tenants’ operations. The company specializes in sale-leaseback transactions, whereby it acquires critical real estate and then leases it back to the seller on a long-term, triple-net basis. As such, due to the inherent nature of its portfolio, the REIT enjoys higher occupancy, which stood at 98.6% as of Dec. 31, 2024, and generates better risk-adjusted returns.W.P. Carey’s portfolio is well-diversified by tenant, industry, property type and geography, aiding steady revenue generation. As of Dec. 31, 2024, its top 10 tenants constitute 19.3% of annualized base rent. Moreover, the existence of long-term net leases with built-in rent escalations yields stable cash flows.W.P. Carey has been capitalizing on growth opportunities. Per the April Business Update, in the first quarter of 2025, W.P. Carey made investments to the tune of $275 million, largely through the sale-leaseback of industrial properties, and disposed of assets worth around $130 million.The sale would largely include non-core assets comprising self-storage operating properties. The gross sale proceeds are to be used for funding value-accretive investments. Such match-funding efforts indicate the company’s prudent capital-management practices and will relieve pressure from its balance sheet, which is encouraging.W.P. Carey has a healthy balance sheet position with ample liquidity. As of Dec. 31, 2024, the company had a total liquidity of $2.6 billion, including around $1.9 billion of available capacity under its senior unsecured credit facility and $640.4 million of cash and cash equivalents. WPC’s share of pro rata net debt to adjusted EBITDA was 5.5X. The company also enjoys investment grade ratings of BBB+ from S&P Global Ratings and Baa1 from Moody’s, rendering it favorable access to the debt market.Solid dividend payouts are arguably the biggest enticement for investment in REIT stocks. After reducing its dividend in December 2023 to 86 cents from the prior quarter's dividend payment of $1.07 as a result of thecompany’s strategic plan to exit its office assets, W.P. Carey increased its dividend three times, which is encouraging. Looking at the company’s operating environment and financial position compared to that of the industry, its current dividend is expected to be sustainable in the upcoming period.Over the past three months, WPC shares have rallied 7.8% against the industry’s decline of 4.2%. Analysts seem bullish about this Zacks Rank #2 (Buy) company, with the Zacks Consensus Estimate for its 2025 adjusted funds from operations (FFO) per share being raised marginally over the past two months to $4.85. Image Source: Zacks Investment ResearchRisks Affecting WPCDue to the uncertain macroeconomic situation, the choppiness in the real estate market continues with subdued demand. This is a concern for W.P. Carey. Tenant bankruptcy woes also ail.Other Stocks to ConsiderSome other top-ranked stocks from the broader REIT sector are Welltower WELL and Cousins Properties CUZ, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for Welltower’s 2025 FFO per share has moved marginally northward to $4.95 over the past month.The consensus estimate for Cousins Properties’ 2025 FFO per share has moved upward by 1.8% to $2.79 over the past month.Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cousins Properties Incorporated (CUZ): Free Stock Analysis Report W.P. Carey Inc. (WPC): Free Stock Analysis Report Welltower Inc. (WELL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks