Gladstone Commercial: Monthly Payer, 7%-8.7% Yields, 'GOOD' Q1-Q2 Growth


  • GOOD's common yields 8.72%, and it has two preferred with yields of 6.59% to 6.94%.
  • All three pay monthly.
  • Q1-2 revenue rose 19%, FFO rose 14.5%, EBITDA rose 7.67%.
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Gladstone Commercial (NASDAQ:GOOD) is a real estate investment trust focused on acquiring, owning and operating net leased industrial and office properties across the US. As of June 30, 2020, Gladstone Commercial’s real estate portfolio consisted of 122 properties located in 28 states, totaling approximately 15.1 million square feet. (GOOD site)

(GOOD site)

GOOD's biggest geographic concentration is in the Southeast and Southwest, at 33% and 27%, respectively. Office, 53%, and Industrial, 43%, comprise the lion's share of its property types.

(GOOD site)

Telecommunications is GOOD's largest single industry exposure, at 16%, followed by Auto, 13%, Healthcare, 10%, Buildings/Real Estate, 7%, and Banking, 6%. It also has exposure to diversified Conglomerate services.

84% of GOOD's tenant revenue is from tenants who on average contribute 1% or less of company revenue.

(GOOD site)

2020 Earnings:

Unlike many other firms, GOOD has had attractive growth so far in 2020 - revenue was up 19.21%, EBITDA rose 7.67% and FFO was up 14.54%. Net income was down -53.11%, mainly due to a non-cash $1.7M impairment charge and $2.65M in additional, non-cash depreciation and amortization charges.

FFO/share has been pretty steady since 2015, running from $1.53 to $1.58. It may see an increase in 2020 if the Q1-2 pace of $.80 repeats in the second half of the year:

(GOOD site)

GOOD's management is emphasizing an increase in GOOD's portfolio of industrial allocation, which it believes will improve its property operating efficiencies, reduce capital expenditure levels, and potentially result in improved valuation over time.

The company's industrial allocation has increased from 33% in January 2019 to 43% in Q2 200, with an objective of achieving a 60% allocation within the next 18 to 24 months. There's a current pipeline of acquisition candidates of ~$255 million in volume, representing 16 properties, all of which are industrial.

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