Store Capital Beats FFO Estimates


Store Capital (STOR) announced earnings February 20th, with total revenue of $173.5 million for the fourth quarter. This brought total revenue for all of 2019 to $665.7 million. 

Christopher Volk, Store Capital CEO, noted the company, “Delivered another year of record investment volume in 2019, reflecting our ongoing success in addressing our large market.”

In Q4, Store invested $536.6 million in 103 properties, with a weighted average cap rate of 7.7%. This was in-line with the 7.8% weighted average cap rate achieved over the course of 2019. 

Net income was $59.8 million, or $0.25 per basic and diluted share, versus $56.6 million, or $0.26 per basic and diluted share in the fourth quarter of 2018. The company sold $11.7 million worth of property in Q4, versus a gain of $14.7 million on the sale of property in Q4 2018. 

Adjusted Funds From Operations (AFFO) for Q4 was $0.50 per diluted share, bringing AFFO for 2019 to $451.8 million, or $1.99 per basic and diluted share. AFFO is used for REITs, because it allows for adjustments to Funds From Operations (FFO) to account for normalized recurring upkeep and accounting for rent. 

Store declared a $0.35 dividend in Q4, making total dividends delivered to shareholders in 2019 $1.36. The company raised $197.8 million in net proceeds from the issuance of approximately 5.0 million shares of stock in Q4 via their at-the-market equity program.

CEO Volk praised the company’s 2019 success, stating, “Stability and quality continued to define our diverse portfolio, and we ended the year with an occupancy rate of 99.5% and approximately 75% of our lease contracts of investment-grade quality as measured by our STORE Score methodology.”

Commenting on Store Capital’s financial performance for the year, Volk stated, “We grew AFFO per share by over 8%, raised our dividend by more than 6% and delivered total shareholder return of over 36%.”

At the end of December 2019, Store Capital’s total portfolio was made up of 2,504 properties, with an estimated value of $8.8 billion. 94% of that portfolio is made up of commercial real estate properties, with long-term leases.

Related: STOR Fourth Quarter 2019 Investor Presentation

The company expects 2020 AFFO per share to be in the range of $2.05 to $2.09. Net income per share in 2020 is projected between $0.98 and $1.01 per share, excluding gains or losses from the sale of property.

Steven Adams’s personal position in Store Capital: none.