STORE Capital Corporation is an internally managed net-lease real estate investment trust or REIT, that is the market leader in the acquisition, investment, and management of Single Tenant Operational Real Estate, which is the company’s target market and the inspiration for its name. STORE Capital Stock is headquartered in New York City and has a market capitalization of $1 billion.
STORE Capital is one of the largest and fastest-growing net-lease real estate investment trusts (REITs). The company owns a large, well-diversified portfolio of investments in more than 2,500 property locations across the United States, with the majority of them being profit centers, according to the company.
Company Purchases Properties and Rents Them Back. Its Stock Is a Buy.
This year, investors have been on the lookout for good bargains, and STORE Capital Corporation has lots to offer in this regard.
A real estate investment trust (REIT) in Scottsdale, Arizona, is a favorite of Good Haven Capital Management, which considers the business among its top ten portfolio holdings. Its principal business is partnering with middle-market enterprises in “sale-leaseback deals,” in which STORE purchases a property and then leases it back to the company.
There are almost 3,000 investment property sites in the United States owned and managed by STORE, which is an abbreviation for Single Tenant Operational Real Estate. These properties serve a variety of businesses including restaurants, retail, and manufacturing.
REIT’s Investment Buildings Were Forced to Close
As a result of the pandemic, many of the firms that were responsible for the REIT’s investment buildings were forced to close, which was understandable for the stock to suffer. However, the stock has mostly recovered from its epidemic low, and Larry Pitkowsky, manager of the Good Haven fund, is bullish about the stock’s future development since the REIT has been “battle-tested,” as he puts it.
Whenever a corporation experiences financial difficulties, Pitkowsky adds, “you have to question how they will manage it.” “[Investors] were able to observe how they handled the situation, which was excellent.”
Now, the company is experiencing a resurgence in growth. It forecasts adjusted funds from operations, a measure of cash flows, to climb 9.3 percent from 2021 to $2.20 per share in 2022, representing an increase from $2.15 to $2.20 per share in the current fiscal year. Additionally, STORE offers a dividend yield of 4.9 percent for income-seeking investors.
“STORE is a well-managed real estate investment trust, and its earnings are increasing,” adds Pitkowsky.
It had been investing in the REIT for some years, and during the pandemic-induced downturn in 2020, it increased its holdings even further—and it wasn’t the only one to do so. According to recent regulatory filings, Berkshire Hathaway increased its stake in the company in the middle of 2020 and currently owns around 9 percent of the company’s stock.
Reason for Store’s Success
Part of the reason for STORE’s success is that the company focuses on properties that are profitable for the businesses with which it partners. This means that even in a down economy, these are the properties that corporations will put forth the most effort to keep up with.
Future purchases, according to the REIT, are also on the cards. It has a market valuation of $8.7 billion, but it claims that its entire addressable market is worth $3.9 trillion, which equates to more than two million residential and commercial buildings. Gaining even the lowest fraction of a market share might result in profits.
Wall Street is largely upbeat about STORE’s prospects. According to FactSet, 29 percent of the analysts that follow the stock have given the stock a Buy rating, with the remaining analysts giving the stock a Hold recommendation. Currently, the average price objective is $36.94, which is a 16 percent increase over the most recent trading levels.
Investors may look forward to receiving a more detailed update later this month, when the REIT releases its fourth-quarter results on February 23.
According to Pitkowsky, “STORE is a firm that hasn’t been properly appreciated.” “It’s a tremendously successful business with a lot of development potential,” he explains.
Predictions for the Stock Market
The median price target for STORE Capital Corp is 34.50, with a high estimate of 39.00 and a low estimate of 28.00 among the 12 analysts that are providing 12-month price projections for the company. The consensus estimate reflects a +17.15 percent rise over the previous closing price of 29.45 dollars per share.
The current opinion among 16 investment experts surveyed is that STORE Capital Corp. shares should be held in a portfolio. Since April, when it remained unaltered from a hold rating, this rating has remained stable.