After a Reset and Rebuild, This Ultra-High-Yield Dividend Stock Is Starting to Grow Again

Core Viewpoint - W. P. Carey is transitioning from a focus on office properties to a diversified portfolio with better long-term growth fundamentals, which is expected to enhance earnings and dividends in the future [1][2][14]. Portfolio Transition - The company exited the office sector at the end of 2023, completing this strategic decision throughout last year [1][2]. - W. P. Carey sold $1.2 billion in properties, including office assets and noncore assets like hotels and self-storage properties [3][4]. Financial Performance - Adjusted funds from operations (FFO) declined by 9.3$4.70 per share last year, but showed a 1.7% increase in the fourth quarter due to new investments and rental escalations [4][8]. - The REIT invested $1.6 billion in new properties last year, with a record$841.3 million in the fourth quarter [5][6]. Investment Strategy - The company focuses on triple net leases with long terms (11.1 to 30 years) that provide steady, rising rental income [6][7]. - Currently, 51% of properties link rents to inflation, while 46% have fixed-rate increases, contributing to a 2.6% annualized growth in same-store rents during the fourth quarter [7][8]. Future Outlook - W. P. Carey expects adjusted FFO to be between $4.82 and$4.92 per share this year, indicating a growth of 2.6% to 4.7% from last year [8][9]. - The company plans to fund investments through post-dividend free cash flow and noncore asset sales, avoiding share dilution [10][11]. Dividend Strategy - The REIT aims to rebuild its dividend, which was reset in late 2023, with a trend of increasing payments observed last year [13][14]. - The combination of income and growth positions W. P. Carey as a compelling long-term investment opportunity for income-seeking investors [15].