Popular O is Trumped by ADC
Hello High Yielding Friend!!
Here is yesterday’s email — also CEO Joey Agree will be joining us on Friday to talk about why ADC is the best REIT in the business!!
More coming from this address, but new sites are being reviewed (why yesterday’s email did not go out) and then we will be up and running with a brand new site for each service.
I hope you are well! If not – this week is REIT week!! Woohoo!!
Last week we saw Agree Realty (ADC), our favorite triple net lease REIT. Now we will argue that the unheralded ADC is better than its much more famous triple REIT sister, Realty Income (O). (from Seeking Alpha)
Realty is flashier with a monthly yield of 5.1%, vs 4.46% quarterly for ADC. But most other numbers favor Agree. It is just growing better than O, and seems to be discounted just because O is more well known.
On past earnings/cash flows O is cheaper than ADC, but even looking at just the next year’s cash flows (EV-to-Projected EBIT and EBITDA) and they are already about even.
Realty Income:
And Agree:
And Realty looks like it has a bit of an inferior balance sheet:
Compared to Agree:
And also note the ROIC — return on invested capital. Agree does a better job deploying capital, getting better returns with shareholders’ money.
It is also notable that CEO Joey Agree is as accessible and transparent as any CEO in the business:
Here is a link to the ADC presentation:
And Realty Income:
https://www.realtyincome.com/sites/realty-income/files/2023-07/investor-presentation-q2-2023.pdf
In addition, I’ve attached the special GuruFocus report for each stock.