COPT Defense: High Rates And DOGE Uncertainty Limit Upside

Summary

• COPT Defense Properties offers a unique defense real estate portfolio with high occupancy and a 4.2% dividend yield but faces growth headwinds from rising interest rates.
• CDP's specialized properties near key government facilities have strong demand, but uncertainties in defense spending and higher refinancing costs could limit future growth.
• It is unclear how much DOGE will seek to cut defense department headcount and spending, though Senate Republicans will likely limit cuts.
• Given current valuation and potential headwinds, CDP is a "hold"; I recommend waiting for shares to approach 10x FFO before buying.

Milan_Jovic

Shares of COPT Defense Properties (NYSE:CDP) have been a solid performer over the past year, adding nearly 15% and paying a 4% dividend. However, shares have also fallen over 15% from their high, which has coincided with a rise in long-term interest rates amid

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.