A Deep Dive Into: $STAG STAG Industrial, Inc.

Who are they and what do they do?

STAG Industrial, Inc is a real estate investment trust, which focuses on acquisition, ownership, and operation of single tenant, industrial properties throughout the United States.

The company was founded by Benjamin S. Butcher on July 21, 2010 and is headquarted in Boston, MA.

The Portfolio

STAG Industrial owns 494 buildings, totaling 99.1M square feet across 39 states. Its portfolio includes warehouses, fulfillment centers, storage units and other properties.

There top 10 tenants include Amazon Inc, XPO Logistics, Eastern Metal Supply, Trimas Corporation, American Tire Distributors, Penguin Random House LLC, Westrock Company, DS Smith North America, Hachette Book Group, Inc, and FedEx Inc.

There tenants are also financially stable with 55% of tenants being publicly rated, 86% having revenues above $100M, and 61% having revenues above $1B.

STAG also has an impressive acquisition pipeline with 1,250+ properties passing the initial triage for investment consideration in 2020, 224 of those transactions were underwritten, 39 transactions closed. Therefore, 3% of transactions considered were acquired and 17% of transactions underwritten were acquired.

Show Me The Money

STAG has proven it can growth revenue year over year. In 2019 STAG brought in a whopping $405.95M. In 2020? $483.41M, a 19% increase in revenue.

It’s not just revenue that’s increasing either. In 2019 Earnings were reported of $49.28M, but in 2020 earnings were reported as $202.15M, a 310% increase!!

The Dividend

STAG is classified as a REIT, and therefore is required to payout 90% of its revenue.

STAG currently pays a dividend of $0.1208 per share, distributed monthly or $1.44 annually. This represents a yield of 3.70% based on current market valuations of $40.07 a share. STAG’s payout ratio is 77.42%

STAG begin paying a dividend in 2011 and has raised its dividend every year since. The company’s dividend has grew on average 4.2% per year.

Is it Safe?

Stags tenant base is spread across 45+ different industries. It’s biggest tenant is Amazon which only accounts for 4% of Revenue. It’s top 10 tenants combined account for 12.5% of revenue showing just how diversified this company is.

On top of that 40% of STAG’s business is e-commerce driven and is expected to grow.

A REIT is required by law to payout 90% of its revenue. With STAG having a payout ratio of 77.42% not only is it safe but we could also see another dividend increase coming soon!

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