Another Mispriced Bargain Preferred Stock From A Property REIT - 7.1% Yield And 17% Return Potential

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We are always on the lookout for opportunities in the preferred shares space, and today we have identified a new one. The Spirit Realty Capital Preferred A stock (SRC.PA) has pulled back recently, providing an attractive entry point. We will explain in this report why SRC.PA should trade much higher, and we will compare it with other similar preferred stocks to highlight the mispricing. SRC.PA recently traded at $21.40, and our short-term price target is at $23.60, or more than 11% higher from here. If the price target is reached within 12 months, that would provide a 12-month return (including dividends) of over 17%. However, we expect this price target to be reached within 6 months or less for an annualized 6-month return of over 27%.
Overview of Spirit Realty Capital
Spirit Realty (SRC) is a net-lease real estate investment trust (Property REIT) that invests in high-quality, single-tenant, real estate assets with long-term net leases. While SRC is diversified across several industries, its portfolio is mainly focus on high-quality retail shops. The company began operations through a predecessor legal entity in 2003.
Spirit Realty has 1470 properties, is geographically diversified among 49 states, has 252 tenants in 32 industries, and has an occupancy rate of 99.6%. The top 5 tenants by rental revenue are Walgreens (Nasdaq: WBA), Church’s Chicken, Home Depot (NYSE: HD), Circle K and CVS... Read more