W.P. Carey Stock Rises 16% Year to Date: Will the Trend Last?

W.P. Carey WPC shares have rallied 16% year to date, outperforming the industry's upside of 4.7%.

The company’s mission-critical, single-tenant net lease commercial diverse portfolio, with contractual rental bumps, strategic portfolio repositioning and a healthy balance sheet, is a key upside.

Last month, WPC announced a 1.1% hike to its dividend. The company paid a quarterly cash dividend of 90 cents per share, up from 89 cents paid in the prior quarter. Based on the increased rate, the annual dividend comes to $3.60 a share.

Solid dividend payouts are arguably the biggest enticement for investment in REIT stocks. Looking at the company’s operating environment and financial position compared to that of the industry, its current dividend is expected to be sustainable in the upcoming period. Check out W.P. Carey’s dividend history here.

Analysts seem positive about this Zacks Rank #3 (Hold) company. The Zacks Consensus Estimate for its 2025 FFO per share has been revised northward marginally to $4.88 over the past two months.

Factors Behind WPC Stock Price Rise: Will This Trend Last?

W.P. Carey has one of the largest portfolios of single-tenant net lease commercial real estate in the United States, and Northern and Western Europe. The company invests in high-quality assets that are mission-critical for its tenants’ operations.

The company specializes in sale-leaseback transactions, whereby it acquires critical real estate and then leases it back to the seller on a long-term, triple-net basis. Under this arrangement, the lessee needs to pay the majority of the operational and maintenance costs for the property. As such, W.P. Carey can generate steady revenues with minimal investments.

Moreover, the portfolio is well-diversified by tenant, industry, property type and geography, which aids steady revenue generation. The existence of rent escalations yields stable cash flows. More than 99.6% of the annualized base rent comes from leases with contractual rent increases, with 49.8% linked to the consumer price index.

W.P. Carey has been capitalizing on growth opportunities. For 2025, management expects total investments between $1 and $1.5 billion and total dispositions between $500 million and $1 billion. The sale would largely include non-core assets comprising self-storage operating properties. The gross sale proceeds are to be used for funding value-accretive investments. Such match-funding efforts indicate the company’s prudent capital management practices and will relieve pressure from its balance sheet, which is encouraging.

WPC has a healthy balance sheet position with ample liquidity. As of March 31, 2025, the company had a total liquidity of $2.0 billion, including around $1.8 billion of available capacity under its senior unsecured credit facility and $187.8 million of cash and cash equivalents. The company’s share of pro rata net debt to adjusted EBITDA was 5.8X. The company also enjoys investment-grade ratings of BBB+ from S&P Global Ratings and Baa1 from Moody’s, rendering it favorable access to the debt market.

Key Risks for WPC

Due to the uncertain macroeconomic situation with policy changes, choppiness in the real estate market continues with subdued demand, which is a concern for W.P. Carey. Tenant bankruptcy woes also ail.

Stocks to Consider

Some better-ranked stocks from the broader REIT sector are VICI Properties VICI and American Tower (AMT), each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for VICI Properties’ 2025 FFO per share is pegged at $2.35, suggesting year-over-year growth of 4%.

The consensus estimate for American Tower’s 2025 FFO per share stands at $10.53, indicating a marginal decrease from the year-ago reported figure.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

This article originally published on Zacks Investment Research (zacks.com).

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