Have you ever wondered how a seemingly modest investment can grow over time, especially in the real estate sector? Let’s delve into the journey of a $10,000 investment made five years ago in Essential Properties Realty Trust, a diversified REIT based in Princeton, New Jersey, and examine the impressive growth this specific investment has achieved.
Essential Properties Realty Trust, with a current market cap of $4.08 billion, boasts a sprawling portfolio of 1,793 properties across 48 states, with an astounding 99.8% occupancy rate. Investors take note of how the company’s properties, primarily single-tenant spaces leased to service and experience-based businesses, have weathered economic shifts. This REIT’s foundation in 2016 set the stage for a financial narrative worth following, particularly for those interested in how real estate investments can pay off over time.
Imagine if you had purchased shares worth $10,000 in Essential Properties five years ago at the price of $13.83 per share. That initial investment would have procured you 723.07 shares. As of the latest update, the shares are valued at $26.03, demonstrating a significant appreciation in the stock price. It’s crucial to highlight that this isn’t just a story of stock value growth; it’s also about the steady and increasing source of income through dividends.
In early December, the company announced a dividend bump from $0.28 to $0.285 per share, its second increase within the year. This strategic move is part of a pattern; over the past five years, Essential Properties has increased its dividend payout eight times, reflecting a solid increase of 35.7%. Remarkably, there have been no cuts or suspensions in dividends during this period, which certainly instills investor confidence in the REIT’s financial stability and commitment to shareholder value.
The numbers tell an even more compelling story. Over the span, shareholders would have received $4.93 per share in dividends. Based on the current share value and the dividends accrued, a $10,000 investment would have ballooned to a total of $22,387.44 — a 123.86% return. For those who opted to reinvest their dividends, they’d be looking at ownership of 913.20 shares and a total value of $23,773.43, which is a remarkable 137.71% return on the investment.
Financial performance isn’t just about dividends and share value; Essential Properties’ operations have shown resilience and growth. According to their most recent earnings report, their third-quarter funds from operations (FFO), although slightly below estimates, reflected an upward trend from the previous year, and their revenue exceeded expectations by a respectable margin.
Even with transitions in the board of directors, with the retirement of Chairman Paul T. Bossidy and the introduction of Scott A. Estes as the new chairman, the company has maintained its positive trajectory. This smooth transition in leadership speaks volumes about the governance and strategic foresight at Essential Properties.
Noting the favorable analyst ratings from B. Riley Securities and other firms, with price targets that suggest continued growth, it’s clear that Essential Properties Realty Trust has not only established a strong five-year track record but also continues to be an attractive proposition for investors looking for stability and growth in the REIT sector.
As we shift our focus to the broader landscape, it’s important for investors to understand the value that comes from investing in REITs. These vehicles provide an opportunity to gain exposure to real estate markets without the need for significant capital or hands-on management of physical properties. They are especially appealing for those seeking to add a measure of passive income to their investment portfolios.
In conclusion, Essential Properties Realty Trust’s performance over the past five years serves as a testament to the potential of REITs as both a source of income and investment growth. For investors seeking to expand their portfolios, it’s a reminder that with the right choices, real estate can indeed be a golden ticket to financial growth and stability. As the industry evolves, staying informed and making strategic decisions is key to harnessing the opportunities that lie ahead.
We encourage you to continue exploring the world of REITs and consider how investments like Essential Properties can fit into your financial landscape. Your journey towards building a robust, income-generating portfolio may well be bolstered by similar investment decisions.
FAQs
What are REITs and why are they considered a good investment? REITs, or Real Estate Investment Trusts, are companies that own, operate, or finance income-generating real estate. They are considered good investments because they offer investors exposure to real estate without the need to directly buy, manage, or finance properties. REITs are also known for providing steady dividends, making them attractive for income-seeking investors.
How has Essential Properties Realty Trust performed in terms of dividend growth? Essential Properties Realty Trust has shown a strong performance in terms of dividend growth. Over the past five years, the company has increased its dividend payout eight times, with an overall increase of 35.7%. There have been no dividend cuts or suspensions during this time.
What was the total return on a $10,000 investment in Essential Properties Realty Trust over the past five years? The total return on a $10,000 investment in Essential Properties Realty Trust over the past five years, without reinvesting dividends, would be 123.86%, equating to $22,387.44. With dividends reinvested, the total return would be 137.71%, or $23,773.43.
How has the change in Essential Properties’ board leadership affected the company? The change in leadership, with the appointment of Scott A. Estes as the new chairman following Paul T. Bossidy’s retirement, has not negatively affected the company. Essential Properties Realty Trust continues to display positive financial performance and strategic growth.
What do analysts currently say about Essential Properties Realty Trust, and what does it signify for potential investors? Analysts, including those from B. Riley Securities, Stifel, and Truist Securities, have given Essential Properties Realty Trust favorable ratings with Buy recommendations. The price targets suggest continued growth potential, signaling that the REIT remains an attractive option for potential investors.
Our Recommendations
“Steady Foundations: The REIT Investment That Continues to Deliver”
At Best Small Venture, we believe that Essential Properties Realty Trust exemplifies the strength and potential of investing in a well-managed REIT. In light of their five-year performance, we recommend investors consider the consistent dividend growth, solid total returns, reputable management, and positive analyst outlook that Essential Properties offers. Whether you’re aiming for long-term growth, income generation, or a combination of both, Essential Properties Realty Trust should be on your radar as a potential cornerstone in your investment portfolio.
What’s your take on this? Let’s know about your thoughts in the comments below!
