W.P. Carey Leases Wide Variety Of Property As Yield Hits 5.5%
W.P. Carey ( WPC ) owns and manages more than 1,000 commercial properties around the world in a wide variety of industries, property types and regions.
The real estate investment trust argues that its broad diversity is one of its strengths, protecting investors from downturns in one area of the economy or region. The strategy dates back to 1973, when William Polk Carey founded the company.
The industries in which it invests range from aerospace and defense to public utilities. Its properties tend to be single-tenant commercial properties.
It buys properties from retailers and others, then leases them back over a period of 15 to 20 years, letting the company monetize its assets, which it can then use to fund acquisitions, pay down debt or reinvest in the business.
Another part of its business buys real estate from auto dealers and leases it back to the dealer. For that segment, it works in partnership with a company called CapRocq Automotive.
At the end of the first quarter, W.P. Carey had an enterprise value of $9.5 billion.
Growth has been erratic. Funds from operation, the REIT equivalent of earnings, were $4.70 a share in 2011, $3.62 in 2012 and $4.23 in 2013. Analysts expect no growth this year or next.
But dividend growth has been steady. On June 19, the company announced a quarterly dividend of 90 cents a share, which works out to an annual yield of 5.5%. It was Carey's 53rd consecutive quarterly dividend increase.
The five-year annualized dividend growth rate is 11%.
Pretax margins are 19%.
Carey's industry group rank has been improving. The Finance-Property REIT industry group is ranked No. 43 out of 197. It was No. 97 just eight weeks ago.