W.P. Carey (WPC) is such a steady hand that we rarely pay much attention to it. All the company does is pay us a generous dividend (5.3%) and raise its payout every quarter. And all its stock price ever seems to do is grind higher, observes Brett Owens, chief investment strategist at Contrarian Income Report.
WPC is an industrial landlord. The company leases out business space to individual tenants. Its portfolio is diversified across 1,216 properties, with its largest tenant (U-Haul) making up just 3.4% of its total portfolio.
Virtually all (99%) of WPC’s leases include contractual rent increases. And 62% of them are linked to the consumer price index (CPI), which is a nice hedge for those of us who are concerned about inflation down the road.
This is our second time with WPC in our portfolio. Veterans of our newsletter will fondly recall the 28% returns we made in just one year during our first go-round. And our sequel is shaping up nicely, with us sitting on 15% total returns plus four dividend raises (you read that right) in just over a year.
The company recently issued additional shares of stock to raise capital. This impacted its stock price but shouldn’t be more than a temporary glitch. This is normal for REITs.
W.P. Carey is funding a future shopping trip. The firm has been actively taking advantage of post-pandemic deals — last quarter, it invested $780 million into 11 acquisitions.
CEO Jason Fox and his team are among the best in the industrial real estate business. I’m raising our buy price on WPC to reflect the four dividend increases we’ve enjoyed during our second run as owners. Action to Take: W.P. Carey up to $85.00 per share.
