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STORE Capital Corporation: Rising Dividends Backed By Net Lease Real Estate

Nov. 02, 2021 6:08 AM ETSTORE Capital Corporation (STOR) Stock6 Comments
Obsidian Limited profile picture
Obsidian Limited


  • STOR is a net lease REIT with a diversified portfolio of retail assets.
  • STOR is backed by Buffett and has outperformed competitors and the broader net lease sector.
  • We dive into STOR and see how the REIT stacks up against the competition.

Pay Rent Note In Calendar

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STORE Capital Corporation (NYSE:STOR) is a single tenant, net lease REIT that develops, acquires, and manages retail properties across the United States. The firm distributes quarterly dividends and has increased the distribution annually since IPO in 2014.

This article was written by

Obsidian Limited profile picture
Obsidian Limited provides investors with income focused insights and research. We identify and cover opportunities across asset classes with a focus on appreciating cash flow.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of O, VNQ either through stock ownership, options, or other derivatives. 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.

This article is not to be considered investment advice. Research provided in this article is supportive of your own thorough and complete due diligence. Please consult your investment advisor on opportunities presented herein.

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 (6)

"STOR derives this metric from their internal rating system dubbed “STOR Score”. While this may be accurate, it certainly does not carry the significance of a credit rating from an established agency."

LOL !! 🤣🤣🤣

Established agencies.... remember that scene from the Big Short that explains the integrity and reliability of established agencies ?

I rate the STOR score as 100 times more serious, simply because STOR, when rating their tenants, have SKIN IN THE GAME.

R. Paul Drake profile picture
@Obsidian Limited One quibble, but it matters. RE: "
Don’t be misled by the claim that 72% of leases are held with investment grade tenants." STORE never makes that claim about their tenants. As stated in the quote you offer, they only make claims about the quality of the contracts. And Chris Volk will tell you that their performance to date validates those claims.
Go595lf profile picture
Thanks for the good presented article and information on STOR. My question/concerned is that the high volume of shares own by Buffett’s Berkshire Hathaway may be dropped when M. Buffet decides that Real estate will not be a core component of Buffett’s investment thesis. A significant value of the stock will go down. Risky for me,
1.21 Jigawatts profile picture
@Go595lf Unsure how much of an issue that creates in reality though. Many, including myself, invest in STOR because it's a good play on the triple-net space, not because Buffett is in. Also hold O, NNN, and ADC, and concur with the author that both STOR and ADC have certainly outdone the other two more established players in the past few years.

In addition, Buffett's investment lieutenant is pulling the majority of the strings now for new investments, so the investing preferences of Buffett himself mean less each passing year...check out Berkshire's investment in STNE; does that really seem like a Buffett-style play? And for every seller, there has to be a buyer, so while a large chunk of shares being sold off would create temporary price pressure, I doubt it in any way would be a meaningful negative longer-term.
Go595lf profile picture
@1.21 Jigawatts Thanks for your comments and information.
1.21 Jigawatts profile picture
@Go595lf No worries! If STOR seems a bit too risky, ADC commands a slightly higher multiple, but is also smaller and growing faster than the other 3 I mentioned. It has a lower yield than the others, but comparable div CAGR to STOR, and a better 5-year total return than all of them. More than 70% of its tenants are investment grade, and it has a small but growing-larger portion of ground leases, which are almost entirely profit margin.
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