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STAG Industrial Proves Its Worth Owning

May 04, 2020 12:36 PM ETSTAG Industrial, Inc. (STAG) Stock7 Comments
AllStarTrader profile picture


  • STAG recently reported quarterly results that showed the company is operating from a position of strength.
  • While many REITs struggle to collect rent, STAG was able to collect almost all of its rent during the economic shutdown.
  • The company offers an attractive monthly dividend that led me to purchase shares during the sell-off.

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Stag Industrial (NYSE:STAG) is an industrial warehouse real estate investment trust or REIT. The company acquires single-tenant properties throughout the United States and is able to capture a higher rate of return due to higher risk. With 456 buildings in 38 states, the company continues its expansion efforts to become the largest owner of properties in its segment. The shares have rallied off the recent lows around $18 a share at the end of March. I was lucky enough to get some shares when they reached this level and have a nice capital gain with shares at $25 already. However, I plan to hold until I find shares overvalued again and will collect the dividend monthly in the meantime.

A True Workhorse

STAG recently reported earnings that show the company is still able to grow and prove itself even in a difficult environment.

Source: Seeking Alpha

The company was able to grow funds from operations or FFO to $0.47 per share which represents 4.4% growth. Seems small, but as a REIT, the company will issue shares to raise capital for purchases thus leading to perhaps a lower per share reported amount. So, if we look at the dollar amount instead, the company grew FFO almost 33%. Rather impressive. The company produced cash available for distributions of $56 million which was 14.2% higher than the year before. This leaves the company plenty of room to increase shareholder returns when the time is right. In the most recent quarter, the company spent a little more than $18 million on dividends.

The company continues to find and acquire buildings meeting its conditions.

Source: Earnings Slides

With the average lease term being 7 years and a cash cap rate of 6.7%, the company will recognize a sound return on investment.

Perhaps of

This article was written by

AllStarTrader profile picture
Started investing at 11 years old. Self taught, taking an analytical all around thought process approach to investing. Look at everything from all angles and every view and you will never miss anything. I believe in collecting dividends from most of my investments, just as an investment in a private company would return profits, so should my stocks. I prefer to invest based on fundamental values, but will consider the story of the company itself when necessary.

Analyst’s Disclosure: I am/we are long STAG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (7)

Stag is losing solo cup.
jlmathis69 profile picture
One lease, 1% of Total Annualized Base Rental Revenue
rdbach profile picture
I bought some at just under $20, but also this morning at $25. I look at STAG as a long term hold. COVID-19 has provided uncertainty about investing in airlines, hotels, retail etc. There should be less impact on income from healthcare and industrial/warehouse REITs.
Jim_Purzickis profile picture
Absolutely agree. LONG STAG
Throwing Ketchup profile picture
I'll buy closer to 20, thanks.
Guy Grim profile picture
It was under $20 on March 16th and March 23rd. Coulda bought then..
It may dip again with market, but no reason for it to move based on fundamentals. Im a buyer under $23
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