Chicago, Illinois – Investors in Agree Realty (NYSE: ADC) have been actively acquiring common and preferred shares of the company since the beginning of the year, taking advantage of the weakened state of these securities. Despite the common shares being down 9% over the last year, the preferred shares are trading at a significant 32% discount to their $25 per share liquidation value. The company’s common shares recently declared a monthly cash dividend of $0.250 per share, maintaining the same rate as the previous month and providing an annual dividend yield of 5.1%. This yield is close to a historical 10-year high for Agree Realty and is supported by the company’s adjusted funds from operations (“AFFO”) guidance for 2024.
Based on the outlook for AFFO growth, the increasing dividend, and the strong balance sheet of Agree Realty, investors are seeing potential in both the common and preferred shares of the company. With a focus on growing AFFO per share by 4.2% year-over-year, the company’s recent performance has been positive, with first-quarter revenue up 18% compared to the previous year. Additionally, Agree Realty has been actively investing in retail net lease properties, demonstrating a commitment to growth despite challenges in the market.
The preferred shares of Agree Realty present an intriguing investment opportunity, offering an investment grade rating and a competitive yield. However, with the recent issuance of senior unsecured notes at a higher rate than the preferred shares, there are elements of risk to consider. On the other hand, the company’s debt maturity schedule and strong liquidity position provide a level of stability that distinguishes Agree Realty from its peers in the real estate investment trust (REIT) sector.
Overall, Agree Realty offers a compelling investment case for both common and preferred shareholders, with the potential for strong total returns in the near term. As investors navigate market uncertainties and potential rate cuts by the Federal Reserve, Agree Realty stands out as a robust investment option with growth prospects and a focus on shareholder value.
