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W. P. Carey: Your Home For Income In An Era Of Inflation

May 01, 2022 12:08 AM ETW. P. Carey Inc. (WPC)32 Comments


  • Quarterly AFFO beats again.
  • 60% of the rent base tied to CPI.
  • Room to grow the dividend without harming the balance sheet.

Stock Market Capital Gains Increasing From A Bull Market

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The Quarter

W. P. Carey (NYSE:WPC) reported one of its clockwork quarters: a beat on the AFFO line ($1.35/share vs $1.31/share estimated) and small raise of the dividend (to $1.057/share quarterly) and a reaffirmation of the annual guidance for the year $5.18-5.30 (6.47% midpoint

This article was written by

CashFlow Hunter profile picture

Cashfow Hunter has over 25 years of experience in the markets, with nearly 20 of them as a hedge fund portfolio manager. His experience investing in debt and equity markets gives him unique insights into markets. He successfully predicted the implosion of Silicon Valley Bank. He has degrees from Wharton and MIT.

He leads the investing group Catalyst Hedge Investing, in which he shares his best long and short ideas. He looks for investment ideas with asymmetric risk/reward and a clear catalyst. Learn More.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of WPC 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.

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Comments (32)

@Market Map ,

"If the investor is in their "income" or retirement stage, and wants to create and manage a flexible income stream in a simple fashion, ......."; that could be me!

Thank you for your contribution to my thinking.

I surmise your comment was in response to the artile title, "Your Home For Income In An Era Of Inflation" which your comment clearly addressed.

I wonder about the article title's congruence with its author's statement, "the whole point of this site is seeking "ALPHA". If he picked the title his exhange with you is a little rude. If SA picked the title, they apparently think the site is broader than its nomiker.

I think Warren Buffet plansfor his wife to draw her income from an index fund.
Once again, I appreciate your comment.

Long WPC myself.
blessed.are.the.brave profile picture
with the dividend payout of 152%, shouldn't that raise concern? What is the coverage of the distribution with the FCF? I see the history is stable so that is a positive, even slightly rising.
What’s the deal with the new prospectus filed, more common stock coming?
CashFlow Hunter profile picture
@rvood they have an at the money program. They issue stock pretty regularly to fund the equity portion of deals and keep their leverage down.
Lawrence Dickman profile picture
It's been my home since Dec 2016 when I bought at $57. I have been dripping and buying on major dips into a full position. I don't get home sick. 😋
Really hope it drops to $75 as I won't increase cost basis for any stock. Great payout and should be safe barring any Russian military action against other countries besides Ukraine .
Bumping 52 week high for me is always a concerning position. But, there seems to not be many places to go right now.
Suspirium Puellarum profile picture
WPC posts excellent earnings, then is worth 5% less the next day? That is ridiculous and I took the other side of that bet.
Lawrence Dickman profile picture
@Suspirium Puellarum Could be the ole Buy on the rumor, Sell on the news.
@Suspirium Puellarum Because of Amazon‘s earnings see below. Agree that is unrelated and ridiculous, WPC is not depending on investing in logistics properties.
Irrational fear has hit the market! The sky is falling! Blood is in the streets! Another day in the market in the world consumed with information and disinformation, facts and the now famous "alternate facts " ! How about we all get up ,do the best we can and buy the best companies on sale and take care of our own lives the best we can. My opinion WPC will be around for a long time and I want to be around holding on to it. Taking shelter from the storm!
Market Map profile picture
WPC ( and Realty Income ( O ) ) exist within the portfolio of the Vanguard Value fund.


If the investor is in their "income" or retirement stage, and wants to create and manage a flexible income stream in a simple fashion, research shows that a portfolio / index representative of the Large cap "value" universe has sustained between a "3.5% - 7%" inflation adj annual withdrawal rate ( "sale of shares", dividends reinvested ), accompanied by terminal portfolio growth, over seventy one rolling 20 year periods and sixty two rolling 30 year periods since 1932 https://tinyurl.com/y6key3v5 . And this income stream survived World Wars, recessions, a myriad of geopolitical and economic environments, pandemics, etc.

Some beneficial features of owning a fund that manages a large portfolio of companies is the diversification over hundreds of companies. With the basic understanding of the mechanics of the ""7%" income withdrawal" process described, income can therefore be derived from hundreds of investments including REITs, and relieves the cumbersome work of managing a large number of individual stocks and / or the "attempts" at individual stock selection, is relieved, placing it in the hands of skilled management team expertise.

A modern investor is fortunate to have available well diversified, large cap value index funds ( such as the low expense Vanguard Value ( VTV ) mentioned, the DFA Large Cap Value, Advantis Large value, Fidelity Value Factor, etc. ), which may be used for this purpose. Hence, the aggregate portfolio appreciation and dividend contributions of hundreds of companies allows for a more flexible and tailored income stream - a pretty simple way to invest and harvest income.

The holding of a fund or funds also makes it easier for the "beneficiaries" of an estate or family office to manage, rather than a hodge podge of individual securities, if and when the mental health or capacity of the "trustor" deteriorates.

Large cap value has also been a decent "inflation hedge" asset class - after annual, year end CPI readings of greater than > +6% have occurred ( 2021 year ending reading = + 6.7% )
CashFlow Hunter profile picture
@Market Map gee, thanks for the advertisement. Lots of alpha there. I hope Vanguard pays you well.
@Market Map yea um WPC represents just 0.08% of this value fund and O represents just 0.11%... I dont understand why you're plugging VTV here. The dividend yield is low enough that you may as well just buy VIG or SCHD to get better capital gains and dividend appreciation
CashFlow Hunter profile picture
@dgi123 he’s most likely getting paid for it.
Bruce Lebowitz profile picture
A great company went on sale Friday
birder profile picture
WPC is one of my largest holdings.
whiz profile picture
@birder that is a good thing for all of us to know
Income4ever aka Cyclenut profile picture
Worth mentioning is also WPC is fast approaching, very soon, Dividend Aristocrats status hopefully DG will become more substantial... instead of the tiny fractional increases we have seen the last several years.
Becoming a Dividend aristocrats is a growth catalyst in itself

I won't be suprised if WPC may attempt to aquire STAG down the road.
cureman55 profile picture
Oversold = buying opportunity
I am long on this stock too, but I wonder why it suddenly fell 5.9% yesterday after what I considered were good Q1 results. Anybody know the reason for that?
@MikeKorea I think just market oversold everything. Stag, for example, dropped closer to 8 percent.
Income4ever aka Cyclenut profile picture
Not uncommon that a stock actually declines significantly on positive earnings.... plus it was on a nice run up too along with the overall market falling... should be $100 by Q4
@MikeKorea Could be related to Amazon’s recent earnings release and commentary about Industrial real estate being overbuilt. Amazon is STAG’s #1 tenant, and the impact may have been felt by any REIT with industrial/warehouse assets.

Just noise for WPC, IMO.
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