• W.P. Carey has been navigating the crisis in the smoothest of fashions you could expect from a REIT with a relatively large retail and office space exposure.
• At no time have rent collections even dipped below 90%, and at no time was the dividend in danger. In fact, the REIT continued its decades long streak of dividend growth.
• W.P. Carey has been shoring up its balance sheet, entering new deals and resuming external acquisition activity.
• The stock price is disconnected from reality, and investors thinking similarly can collect a juicy 6.5% dividend yield.

More than eight months into the pandemic, W.P. Carey (WPC) continues to deliver rock-solid results, defying concerns about rent collection and even resuming external acquisition activity, and yet, the stock is hardly moving. Despite almost being completely insulated from the pandemic so far, the stock is yielding more than 6% and keeps its dividend growth streak intact.

The company's stock price is disconnected from reality and thus offers a generous opportunity for long-term dividend investors.

What is going on at W.P. Carey?

W.P. Carey's third earnings report since the pandemic has begun paints the same picture as the two preceding earnings releases this year. Rent collections are increasing, new deals are being made, the dividend remains safely covered and the REIT is able to tap the debt markets at record-low coupon rates.

Despite all the good news, the stock price is hardly moving, and if there is any direction, it is downward. After a sharp rebound following the even sharper late March drop, the stock price briefly recovered into the mid-$70s, but ever since, it has been on a downward trend.

Data by YCharts

W.P. Carey offers one of the most diversified portfolios in the triple-net lease universe with over 1,200 net lease properties stretched almost equally across four main property types: Industrial, Warehouse, Office and Retail.

In Q3/2020, AFFO came in at $1.15, representing a sequential improvement of $0.04 as overall real estate collection rates climbed from 96% in Q2 to an almost perfect 98% in Q3. Numbers for October are even better, with rent collections hitting 99%, the only exception being W.P. Carey's miniscule exposure to COVID-19 sensitive sectors in fitness, theaters and restaurants.

This exceptional performance cannot be stressed enough given the world we are currently living in. Over the last months, rent collections have developed as follows: 97% in April, 96% in May, 98% in June, 98% in July, 98% in August, 98% in September and 99% in October.

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