Stag Industrial, a high-yield REIT focused on e-commerce, sees growth potential and stock momentum

From Nasdaq: 2024-07-24 21:06:59

“Amazon’s Prime Day sales event boosts e-commerce, benefiting industrial REITs amid expectations of a September rate cut and cooling inflation. High-yield REITs become more attractive to investors as bond yields decline, with the REIT market set to grow by $333.01 billion through 2027.”

Stag Industrial, founded in 2010, specializes in single-tenant industrial properties across the US. With a market cap of $7.3 billion, the REIT offers a 3.67% dividend yield and has been consistently raising dividends for 11 years. Its Q1 earnings surpassed estimates, driving stock momentum up by 16% since May.

During Q1, Stag signed 29 leases and acquired new properties, including a warehouse in Cincinnati and buildings in South Carolina and Tampa. With a focus on e-commerce, the REIT boasts a weighted average lease term of 4.4 years and above-market rent growth. Analysts anticipate FFO and revenue growth ahead of sector medians.

Wedbush analyst upgrades Stag Industrial to “Outperform” with a price target of $44, projecting an 11% premium. Pairing STAG with Eastgroup Properties is recommended for a combination of momentum and value in the industrial REIT sector. Analysts are bullish on STAG’s potential amidst sector rotation.



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