Investors who dumped Realty Income (O) in October and W.P. Carey (WPC) missed out on a massive rally that followed. The REITs rebounded after investors digested their big investments and strategic shifts. Markets are also preparing for interest rate cuts. Low rates are the primary driver to lifting REIT stock prices.
Realty Income posted a Q3 FFO of $1.04. Revenue increased by 24.2% Y/Y to $1.04 billion. The firm increased its cash levels by selling $885.9 million of stock at an average price of $58.58. O stock carries a net debt to annualized pro forma adjusted EBITDAre of 5.2 times. Realty expects to exceed investor expectations.
WP Carey shocked markets when it separated its office real estate portfolio into an NLOP spin-off. Instead of falling after the distribution. WPC stock bottomed at $51.36. It closed at $63.38 last week. WPC posted revenue growing by 16.9% Y/Y to $448.6 million. In 2024, it has an AFFO guidance of $4.60 - $4.80 a share.
In 2024, expect WPC stock to pay 70% of $4.60 or a maximum of 75% of $4.80 for dividends. That translates to $3.22 to $3.60 a share.
WPC and O stock could slip from here if investors decide to take profits. Wait for a meaningful pullback before re-establishing an overweight position.
