SRC Stock Forum

🇺🇸 Initial purchase #2 in October '22 🇺🇸

Hello everyone 🙋‍♂️. Hope you are enjoying your Sunday! In October there was next to $SRC another, somewhat more speculative, first purchase. And it was again a REIT!

➡️ 100 shares of UMH Properties ($UMH (-1.33%)) were bought at 16.136 USD per share into the portfolio.

➡️ I have had UMH Properties on my watchlist for some time now and decided in October to open a risk-adjusted position (approx. 0.6% weighting).

➡️ UMH is one of three REITs that specialize in manufactured housing. Because people can still afford this type of housing, even more so in the current situation, demand is unabated.

➡️ 2022 UMH has taken a decent hit (YTD -34%). However, FFO is still expected to grow strongly and rent is also higher than in previous years. If the NAV is used as a basis, this results in a discount of >30%.

➡️ Admittedly, my investment case contains a speculative element. Namely, I see UMH as a potential takeover target. There has been quite a bit of M&A activity, particularly among small cap REITs. Moreover, UMH was founded by the Landy family, who have decent skin-in-the-game and have sold a REIT (MNR) before.

🇺🇸 Initial purchase #1 in October '22 🇺🇸

Hello everyone 🙋‍♂️. There is another new acquisition in the depot since a few weeks!

➡️ 70 shares of Spirit Realty Capital (SRC) are available at 36.32 USD per share are new in the portfolio.

➡️ Once again there is a new addition to the portfolio and unsurprisingly it is a REIT.

➡️ Spirit Realty is a Net Lease REIT, similar to Realty Income but much smaller and extremely diversified. As of today, the company owns 2,078 properties that are leased to 342 tenants.

➡️ The Net Lease Subsector is home to many companies that have super dividend continuity and growth. This is also true for $SRCwhich even during the pandemic had more than 99% occupancy (currently 99.8%).

➡️ P/FFO is currently 10.44x, which is well below the sector average. Dividend was just raised by 3.9% in August and AFFO is expected to grow in the high single digits.

➡️ Of course, there is also a nice dividend yield of 7%.