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Agree Realty: Opportunistic Growth During Turbulent Times


  • Agree Realty has a strong track record of market-beating returns.
  • It had one of the highest rent collection rates among peers in May, due to its high quality portfolio of many essential tenants.
  • The company has a strong growth runway as it is able to take advantage of depressed prices, backed by its strong balance sheet.

We are certainly living in turbulent times with COVID wreaking havoc on the economy, resulting in millions of jobs lost. With the Fed Chairman Jerome Powell announcing the intention to keep rates near zero through 2022 and an expectation that GDP will contract by 6.5% in 2020, it seems we should be prepared for more volatility ahead.

Currently, the market is seemingly bouncing between exuberance of the re-opening of the economy with a desire for a return to normal, and the reality of a recession and the possibility of a second wave of infections. While the volatility undoubtedly spooks many investors, I believe there are companies that provide a safe haven for investment dollars and can opportunistically emerge from the recession stronger than before.

A Choice For Turbulent Times

Agree Realty (NYSE:ADC) is a $4 billion net lease REIT with 868 retail properties covering 16.3 million square feet in 46 states. It collects steady rent checks from established tenants, 61% of whom are investment-grade rated, with an average remaining lease term of 9.8 years.

As seen below, Agree Realty has underperformed the S&P 500 over the past six months by an 8% margin. While ADC has recovered from the ‘sell-everything’ phase of the downturn, the market is still seemingly pricing in a fair amount of risk into its share price. To be sure, there has been plenty of headline risk for the retail sector, which has inevitably affected their landlords. However, as I will show later, things are not all doom and gloom for this REIT as the positives far outweigh the negatives.

(Source: Yahoo Finance)

While the short-term performance gives pause for concern, a look into the long-term picture below provides a much clearer perspective.

(Source: Dividend Channel)

As seen above, Agree Realty has vastly outperformed the S&P 500 over

This article was written by

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Build sustainable portfolio income with premium dividend yields up to 10%.

I'm a U.S. based financial writer with an MBA in Finance. I have over 14 years of investment experience, and generally focus on stocks that are more defensive in nature, with a medium to long-term horizon. My goal is to share useful and insightful knowledge and analysis with readers.  Contributing author for Hoya Capital Income Builder. 

Analyst’s Disclosure: I am/we are long O. 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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