Founded in Scottsdale, Arizona, STORE Capital is a diversified REIT (Real estate investment trust) that purchases land and Real estate in the United States. InvestorObserver gives STORE Capital a 33 rating, which is below average. I believe STORE Capital is one of the best investments for the new year, and here’s why:
Because of its high dividend yield of 4.36% ($1.44 yearly/share), STORE Capital is a highly acclaimed real estate sector stock. STORE Capital has an 8.66B market cap with an average volume of 2,190,138 shares traded. Recently, STORE Capital has been extremely bullish on Wall Street. Analysts suggest STORE Capital has a 3.0 value rating, a 3.5-4.0 growth rating, and a 4.0 profitability rating.
Revenues since 2015 have consistently risen & have reached all-time highs every year. Although the chart above suggests 2020 and 2021’s revenue estimates will soon be more than 700M, the vaccine (if released to the public earlier) could enable STORE Capital to generate more revenues than the evaluation for 2021. STORE Capital generates enough income that their Revenue fares synonymous with their income. However, their net income fell short in 2020, compared to 2019. In 2020, their income could reach 217.7M, whereas, in 2019, the net income was 285M.
The STORE Capital EPS estimate fell short in 2020, although we can attribute this to the COVID-19 pandemic affecting businesses. Despite STORE Capital having a lower EPS estimate, their dividend/share continued to rise; we can assume this has to do with a growing number of outstanding shares & more bullish sentiment towards the company.
STORE Capital devotes its investment interests to their Real estate assets, which continue to grow. This year, Real estate has been a leading investment option for entrepreneurs. The asset column in STORE Capital’s balance sheet poses an estimate of 8,720.4B, a little more than 2019’s asset report of 8,276.5B.
Because STORE Capital generates enough income & revenue, they’re able to pay off their debts. This year alone, they lowered their long-term debt to 3,564.5B, compared to their long-term debt in 2019 of 3,591.0B. Their liabilities have barely changed, only growing from 3,811.1B in 2019 to 3,811.7B this year.
The shareholder’s equity of STORE Capital has consistently grown over the past five years since the 2014 IPO, a strong indication that investors are buying more of the stock as time progresses. STORE Capital’s shareholder’s equity is estimated as 4,908.7B today.
STORE Capital on the Real estate business front has increased land & building capacity while limiting debts. Land purchase growth is 2,757.9B, compared to last year’s 2,634.3B. Building growth reached 5,905.6B compared to 2019’s 5,540.7B estimate.
Store Capital has a beta over 1. The share price moves in a similar direction to the stock market in the long-term; however, at risk of sudden price changes. In March of 2020, when COVID-19 first impacted the stock market, stock prices dropped substantially. Unfortunately, STORE Capital suffered from the massive losses the market faced. However, since the market has performed well these past few months, STORE Capital’s share price has grown alongside the market. If the market continues to stay bullish, STORE Capital will also continue to fare bullish unless the Real estate industry sector faces sudden regulations or takes a hit.
Berkshire Hathaway Inc. (Warren Buffett) purchased shares of $STOR in 2017 and has increased their holdings since the summer while selling most of their position in the airline & financial sectors. Warren Buffett promotes the philosophy of buying stocks with high & attractive dividend yields. STORE Capital has a dividend yield of 4.36%, a growing revenue of over 8.55% (YoY), and a recent six-month price momentum of 39.02%.
$STOR is the number 1 stock to have in your portfolio if you plan on investing 20% of your paycheck in the stock market, in my opinion, and one of the greatest value investors of all time also agrees.