W.P. Carey Stock Rises 14.1% YTD: Will the Trend Continue?

W.P. Carey WPC shares have rallied 14.1% year to date, outperforming the industry's upside of 3.3%.

W. P. Carey is poised to benefit from a high-quality, mission-critical, diversified portfolio of single-tenant net lease commercial real estate in the United States, and Northern and Western Europe. Its specialty in long-term sale-leaseback transactions with contractual rental bumps leads to steady revenue generation. Strategic portfolio repositioning efforts appear promising. A solid balance sheet aids future growth endeavors.

Last April, WPCreported first-quarter 2025 adjusted funds from operations (AFFO)per share of $1.17, missing the Zacks Consensus Estimate of $1.19. However, the figure improved 2.6% from the year-ago quarter. Results reflected dispositions impacting revenues, though net investment activity and certain lease structuring aided the performance to some extent.

Analysts seem positive about this Zacks Rank #2 (Buy) company. The Zacks Consensus Estimate for its 2025 FFO per share has been revised northward marginally to $4.88 over the past month.

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. It also specializes in sale-leaseback transactions. As such, due to the inherent nature of its portfolio, the REIT enjoys higher occupancy, which stood at 98.3% as of March 31, 2025, and generates better risk-adjusted returns.

Moreover, the portfolio is well-diversified by tenant, industry, property type and geography, aiding steady revenue generation. The existence of rent escalations yields stable cash flows. More than 99.6% of annualized base rent comes from leases with contractual rent increases, with 49.8% linked to the consumer price index. The company witnessed contractual same-store rent growth of 2.4% in the first quarter of 2025.

W.P. Carey has been capitalizing on growth opportunities. In the first quarter of 2025, W.P. Carey made investments to the tune of $275.1 million, largely through the sale-leaseback of industrial properties, and disposed of nine assets worth around $129.8 million. For 2025, the total investment value is estimated between $1 and $1.5 billion and total dispositions between $500 million and $1 billion. With solid access to capital, the company is well-poised to take advantage of any potential opportunity.

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.

Solid dividend payouts are arguably the biggest enticement for investment in REIT stocks. After reducing its dividend in December 2023 to 86 cents from the prior quarter's dividend payment of $1.07 as a result of the company’s strategic plan to exit its office assets, W.P. Carey increased its dividend three times, which is encouraging. Specifically, in March 2025, the company’s board announced a regular quarterly dividend of 89 cents per share, indicating a 1.1% hike from 88 cents paid a quarter ago. 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.

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.

Other Stocks to Consider

Some other top-ranked stocks from the broader REIT sector are VICI Properties VICI and Uniti Group UNIT, each carrying a Zacks Rank #2 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 $2.34, suggesting year-over-year growth of 3.5%.

The consensus estimate for Uniti Group’s 2025 FFO per share stands at $1.50, indicating an increase of 11.1% 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.

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

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