Should You Buy W.P. Carey While It's Below $60?

Core Viewpoint - W.P. Carey offers a high dividend yield of 6.3%, significantly above the S&P 500's 1.2% and the average REIT's 3.8%, raising questions about the underlying risks associated with this investment opportunity [1] Dividend History - A dividend cut occurred at the start of 2024, which may deter conservative investors, but the dividend was subsequently increased in the following quarter and has continued to rise every quarter since [2][3] Portfolio Strategy - The decision to exit the office sector, which represented 16% of rents, was made to enhance the long-term outlook of the REIT amidst a downturn in that sector [3] - The exit from the office sector has provided W.P. Carey with cash to invest in new opportunities, with a record dollar volume of deals in Q4 2024 setting the stage for growth in 2025 [6] Financial Position - Rising interest rates present a challenge for W.P. Carey, increasing its cost of capital and complicating growth efforts, as REITs typically need to issue debt and equity for acquisitions [4] - Despite these challenges, the REIT's diversified portfolio across industrial (35%), warehouse (28%), and retail (12%) sectors, along with its geographical exposure (64% North America, 36% Europe), positions it favorably [7] Investment Consideration - The dividend reset may exclude W.P. Carey from some investors' portfolios, but the overall strategic decisions have potentially improved its standing as a net lease REIT [8][9] - The combination of diversification, a return to dividend growth, and anticipated financial performance improvements in 2025 may make W.P. Carey an attractive investment while shares are priced below $60 [9]