STORE Capital specializes in single-tenant properties that it leases to middle-market corporate tenants from the service, retail, and manufacturing sectors. The REIT owns 2,656 properties and has 522 tenants across 49 U.S. states. STOR’s property portfolio boasts an occupancy rate of 99.6%.
Approximately 25% of STORE Capital’s portfolio is leased to tenants like restaurants, health clubs, child care, and movie theatres that suffered last year because of the pandemic. Rent collections have improved in 2021 as businesses have reopened, and the REIT delivered a good March quarter with adjusted Funds From Operations (FFO) per share up 4.3% from the year prior. As a result, STOR is guiding for 2021 adjusted FFO of $1.90 to $1.96 per share, up 5.6% from last year at the low end of the range.
STORE Capital has generated 4.2% annual FFO growth. In addition, STOR is one of the best value REITs in delivering strong dividend growth — raising its payout an average of 6.4% annually since 2015 — and a better-covered dividend relative to its peers.
The REIT has identified nearly 200,000 small companies as potential tenants within its target markets and plans aggressive growth via acquisitions. STOR has $12.4 billion of real estate in its pipeline, a fortress-like balance sheet, and well-laddered debt maturities that support its acquisition strategy.
STOR shares are valued at an 18-times multiple to forward adjusted FFO and at a 12.5% discount to similar REITs.