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W.P. Carey Inc. Outperforms In Q4

Feb. 16, 2021 1:18 PM ETW. P. Carey Inc. (WPC)
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Kirk Sidwell's Blog
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REITs, Dividend Investing, Preferred Stock

Seeking Alpha Analyst Since 2020


  • W.P. Carey Inc. outperformed expectations in Q4, leading to a robust guidance for 2021.
  • WPC executives are looking to increase investment volume in 2021 given the balance sheet flexibility and capital markets activity.
  • Occupancy, rent collection, FFO, and AFFO remained strong in Q4 and look to continue into 2021.

It’s earnings season and analysts are busier than ever! This past December, I wrote an article covering W.P. Carey Inc. (LINK HERE) explaining the features that made the company attractive to our team at Southern Waters Capital. Our outlook continues to remain bullish, as WPC outperformed in Q4 2020 and looks to hold that trend through 2021. Let’s get into some updates regarding WPC’s performance.

Q4 Highlights

  • Adjusted FFO per share of $1.20 beats estimates of $1.12: an increase from $1.15 in Q3.

  • A rent collection rate of 99% and portfolio occupancy of 99%.

  • Real Estate FFO per share of $1.16: an increase from $1.12 in Q3.

  • Revenue of $307.4M, beating estimates by $10.25M.

Given that Q4 earnings were better than expected, analysts and executives are optimistic about the 2021 outlook. Here are some 2021 estimates for WPC:

2021 Outlook

  • Adjusted FFO per share of $4.79 - $4.93 for 2021, much more than the consensus estimate of $4.60.

  • Full-year investment volume of $1B - $1.5B, compared to $825M in 2020.

  • Real estate FFO per share of $4.66 - $4.80.

  • AFFO guidance includes $9.5M in cash dividends generated from “other” real estate investments (such as Lineage Logistics).

Here’s what Toni Sanzone, MD & CFO, had to say in the Q4 conference call regarding capital projects:

“Regarding the timing of investments in 2021, as Jason mentioned, we've already completed $203 million of investments so far this year, including capital investment projects. We currently have an additional $102 million of capital projects scheduled to complete in 2021, and we expect to add more as the year progresses. The expected completion dates for current projects are provided in our supplemental."

"Our guidance also assumes additional investments not currently in our pipeline are more weighted towards the end of the year. Disposition activity for the year is expected to fall between $250 million and $350 million. We expect the portfolio to remain resilient while we continue to navigate the disruption caused by the pandemic."

"Our current guidance assumes rent disruption continues to track at about the same level as we've been experiencing with the possibility of some variation in either direction, depending on the severity and duration of lockdowns.”

- Toni Sanzone, MD & CFO, Q4 Conference Call (LINK HERE)

Southern Waters Capital remains bullish on WPC and is excited for what’s ahead for the company in 2021.

Analyst's Disclosure: I am/we are long WPC.

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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