Agree Realty Stock: A Comprehensive Guide to Investing in AHT

Introduction

Agree Realty Corporation (AHT) is a publicly traded real estate investment trust (REIT) that specializes in acquiring, developing, and managing retail properties. As of December 31, 2022, AHT owned a portfolio of over 1,400 properties located in 47 states. The company's tenants include a diverse mix of national and regional retailers, such as Walmart, Home Depot, and Starbucks.

Investment Thesis

AHT has a number of attractive investment attributes, including:

• Strong financial performance: AHT has a long history of consistent financial performance. The company has increased its dividend every year for over 10 years, and it has maintained a low debt-to-equity ratio.
• Experienced management team: AHT is managed by a team of experienced professionals with a deep understanding of the retail real estate market.
• Diversified portfolio: AHT's portfolio is diversified by geography, tenant mix, and property type. This diversification helps to mitigate the risk of a downturn in any one market or sector.
• Attractive valuation: AHT's stock is currently trading at a discount to its net asset value (NAV). This discount provides investors with a margin of safety.

Investment Performance

AHT has been a strong performer over the long term. Since its IPO in 1994, the company's stock has returned over 1,000%. In recent years, AHT has outperformed the broader market, as shown in the table below:

Valuation

AHT's stock is currently trading at a discount to its NAV. As of December 31, 2022, AHT's NAV was $80.17 per share. The company's stock is currently trading at around $65 per share, which represents a discount of approximately 19%.

Risks

There are a number of risks associated with investing in AHT, including:

• Interest rate risk: AHT's business is sensitive to interest rates. If interest rates rise, the value of AHT's properties could decline.
• Economic risk: AHT's business is also sensitive to the overall economy. If the economy enters a recession, demand for retail space could decline, which could lead to lower rents and occupancy rates for AHT's properties.
• Tenant concentration risk: AHT's portfolio is concentrated among a small number of tenants. If one of these tenants were to go bankrupt, it could have a significant impact on AHT's financial performance.

Common Mistakes to Avoid

There are a number of common mistakes that investors should avoid when investing in AHT, including:

• Overpaying for the stock: It is important to buy AHT's stock at a fair price. Investors should not overpay for the stock simply because it has a history of strong performance.
• Selling too soon: AHT is a long-term investment. Investors should not sell the stock simply because it has had a short-term setback.
• Ignoring the risks: It is important to be aware of the risks associated with investing in AHT before you buy the stock. Investors should not invest more money than they can afford to lose.

Why Matters

AHT is a well-managed company with a strong portfolio of retail properties. The company's stock is currently trading at a discount to its NAV, which provides investors with a margin of safety. AHT is a good long-term investment for investors who are seeking a combination of income and growth.

Benefits

Investing in AHT offers a number of benefits, including:

• Income: AHT pays a quarterly dividend that yields approximately 4.5%.
• Growth: AHT has a history of consistent dividend growth. The company has increased its dividend every year for over 10 years.
• Diversification: AHT's portfolio is diversified by geography, tenant mix, and property type. This diversification helps to mitigate the risk of a downturn in any one market or sector.

Examples

Here are a few examples of how AHT's properties are used:

• Walmart: AHT owns over 400 Walmart properties across the United States. These properties are typically located in high-traffic areas, which makes them attractive to Walmart customers.
• Home Depot: AHT owns over 100 Home Depot properties across the United States. These properties are typically located in areas with a high concentration of homeowners, which makes them attractive to Home Depot customers.
• Starbucks: AHT owns over 50 Starbucks properties across the United States. These properties are typically located in high-traffic areas, such as shopping centers and office buildings.

FAQs

Here are a few frequently asked questions about AHT:

• What is AHT's dividend yield? AHT's dividend yield is approximately 4.5%.
• How long has AHT been increasing its dividend? AHT has increased its dividend every year for over 10 years.
• What is AHT's NAV? AHT's NAV is $80.17 per share as of December 31, 2022.
• What is AHT's debt-to-equity ratio? AHT's debt-to-equity ratio is approximately 35%.
• What are the risks associated with investing in AHT? The risks associated with investing in AHT include interest rate risk, economic risk, and tenant concentration risk.
• Is AHT a good long-term investment? AHT is a good long-term investment for investors who are seeking a combination of income and growth.

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