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W.P Carey (WPC): A High Dividend Dividend REIT For Current Income

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March 23, 2018 – Comments (0) | RELATED TICKERS: WPC

W. P. Carey Inc. (WPC) is an independent equity real estate investment trust. The firm also provides long-term sale-leaseback and build-to-suit financing for companies. It invests in the real estate markets across the globe. The firm primarily invests in commercial properties that are generally triple-net leased to single corporate tenants including office, warehouse, industrial, logistics, retail, hotel, R&D, and self-storage properties.

W.P. Carey is a dividend achiever, which has managed to boost dividends for 20 years in a row.  The most recent dividend increase was just last week, when the Board of Directors increased its quarterly cash dividend to $1.015 per share, equivalent to an annualized dividend rate of $4.06 per share. The attitude towards distributions was summarized quite well by the statement of W. P. Carey's CEO Jason Fox:

"W. P. Carey has delivered consecutive annual dividend increases since going public in 1998. We are proud of our long-standing track record of providing shareholders with stable and recurring income generation across all market cycles,"

In September 2012, this dividend achiever converted from a partnership form into a real estate investment trust. After this transformation, as well as merger with one of its privately managed REIT, dividend growth has been spectacular initially.Subsequently, it to slowed down  and I expect it to be slow for the foreseeable decade.

The company not only invests in triple-net lease properties throughout the world, but it also managed privately held REITs. As a result, its sources of revenues are derived from the stable and recurring rents from those properties, which are usually leased to tenants under long-term leases. Those triple-net leases also allow for rent escalation over time. Under a triple-net lease, the tenant is required to pay all expenditures associated with maintaining and operating the property under lease

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