01773 766 007 sales@stag.com
Quote Me Client Login Build Your Own Activities Destinations Get in Touch

Stag Industrial Inc

STAG is an industrial real estate operating company that offers a platform that is capable of addressing a myriad of real estate ownership and tenancy scenarios. It was formed as a Maryland corporation and was elected to be treated as a real estate investment trust, better known as “REIT”, under Sections 856 through 860, Internal Revenue Code of 1986 (as amended).


What are REITs?  

A real estate investment trust or REIT as we know it is a company that’s involved in the ownership, operations or financing of income-generating real estates. A company has to meet specific regulatory guidelines in order to be qualified as a REIT. REITs can be compared to mutual funds as these too allow individual investors to gain ownership in commercial income-producing real estate portfolios.


Categories of REIT:

·     Equity REITS: These REITs are the most common ones and these give the investors to invest in and own properties that are income-generating. These REITs have to distribute at least 90% of income derived from the portfolio to its shareholders as dividends.

·     Mortgage REITs: This REIT is all about investing and owning property mortgages. These give loan moneys to real estate operators and owners not just for mortgages but also for various types of real estate loans or for purchasing through mortgage backed securities. The earnings are mainly in the form of the net interest margin i.e. the difference between the cost of funding the loans and the interest that they gain on these mortgage loans. Hence these kinds of REITS are sensitive to interest rate changes.

·     Hybrid REITs: This kind of REIT is basically a combination of the above two where investment is done in both properties and mortgages.


Guidelines to be met for a company to qualify as REIT:

·     Investment of at least 75% of its total assets in cash, real estate or US treasuries.

·     It should receive at least a minimum of 75% of its gross income from areas such as interest on mortgages that finance real property or from rents on real estate or from real estate sales.

·     It should be an entity that is applicable to be taxed as a corporation.

·     It should have a minimum of 100 shareholders.

·     It should pay a minimum of 90% of its taxable income as shareholders’ dividends every year.

·     There should be a board of directors or trustees to manage the company.

·     Five or fewer individuals should not hold more than 50% of its shares.


Stag Industrial Inc. As a REIT:

Stag Industrial (“Single Tenant Acquisition Group”) is an industrial real estate operating entity that concentrates on acquiring and operating of mono-tenant industrial properties all over United States. Focusing on such a type of property, nyse:stag showcases the development of such an industrial strategy that is helping investors gain a balanced income and growth output. Founded in 2010, Stag Industrial has its headquarters in Boston, Massachusetts, United States.

Stag Industries have an enterprise value of $4.3 Billion, 72.5 million square feet and 370 buildings spread across 37 states. The company took birth as a Maryland Corporation and qualified to be a REIT under section 856 of the internal revenue code of 1986 as changed.  According to December 31 2016, Stag real estate boasted of 243 buildings that are used as warehouses, 54 buildings that manufactured light, 16 flex or office buildings and one building kept for redevelopment.


The People of Stag:

·     Benjamin Butcher, 64, since 2014- Chairman, President, Chief Executive Officer.

·     William Crooker, 38, since 2016- Chief Financial Officer, Executive Vice President, Treasurer

·     Stephen Mecke, 55, since 2011, Chief Operating Officer, Executive Vice President

·     Peter Fearey, 49, since 2016, Executive Vice President, Chief Technology Officer

·     David King, 50, since 2011, Executive Vice President, Director - Real Estate Operations

·     Jeffrey Sullivan, 49, since 2015, Executive Vice President, General Counsel, Secretary

·     Larry Guillemette, 62, since 2015, Lead Independent Director


Stag Industrial Stock:

Stag Industrial mainly invests in properties that have been priorly used in industrial, light manufacturing and commercial activities. Some of these buildings may contain underground storage tanks that stored hazardous substances like petroleum and others. As reported of December 2016, Stag Industrial had its properties in different places such as Idaho Falls, Idaho; Harvard, Gurnee and Itasca in Illinois; Albion, Franklin and Marion in Indiana; Marion, Iowa; Lenexa, Kansas; Bardstown and Hebron in Kentucky; Belfast and Portland in Maine; Sparks, Maryland; Chesterfield, Kentwood and Novi in Michigan; Reno, Nevada; Buffalo and Johnstown in New York; Charlotte, Mebane and Newton in North Carolina, Montgomery, Alabama; Rogers, Arkansas; Phoenix, Arizona; Camarillo, California; Golden and Grand Junction in Colorado; Avon and North Haven in Connecticut; Newark in Delaware; Daytona Beach, Ocala, Orlando and Pensacola in Florida; Calhoun, Dallas, Forest Park and Norcross in Georgia; and Boardman and Fairborn in Ohio. Out of these the featured properties are:

·     Deforest, WI- 254,431 SF

·     Jacksonville, FL- 378,100 SF

·     Montgomery, AL- 332000 SF

·     West Chester, 0H- 269,8686 SF

·     West Columbia, SC- 176,400 SF

·     Waukegan, IL- 131,252 SF


Key Developments of Stag Stock:

·     2017 Quarter 4 Core FFO per share- $0.44

·     Quarter 3 Core FFO per share- $0.43. The company reported $0.20 of net income for every basic and diluted share.

·     Quarter 2 Core FFO per share- $0.41. It generated cash NOI of $58 million in this quarter as compared to the 449 million which was generated in the second quarter of year 2016. Hence, there has been an increase of 18.3%.

·     Quarter 1 Core FFO per share- $0.41. The quarterly total revenue is $69.5 compared to that of $60.9 million of 2016’s quarter 1.


News of Stag:

·     The company announced its first quarterly results for 2018. Cash NOI of $64.2 million was generated which showcased an increase of 13.6%.

·     The company announced unaudited and unconsolidated earnings for the second quarter ending June 30, 2018. For this quarter, the company announced total revenue of $85474000 against the $72193000 for the previous year. Net income of the stockholders was $9264000 against the loss of $1119000 of the previous year. Income per share of the shareholders was $0.09 against the loss of $0.01 per share the previous year. Cash net operating income was $67565000 against the $57992000 a year back. Funds from operations for the common stockholders were $44203000 against the $33659000 for the previous year.

·     The company is to issue $175 million term loan and closes new unsecured $500 million credit facility.


Financials of the Company:

·     For Financial year 2018, June showed revenue of $85.47 million while the earnings per share werem$0.092. March showed revenue of $83.28 million while the earnings per share were $0.217.

·     For financial year, 2017, Quarter 1 showed revenue of $69.48 million, while EPS was $-0.029. Quarter 2 showed revenue of $72.19 million while EPS was $-0.013, Quarter 3 showed revenue of $78.14 million while EPS was $0.198 and quarter 4 showed revenue of $81.27 million while EPS was $0.064.

·     The growth trend shows that sales% increases from $20.32 million in 1 year to $29.07 million in 5 year while the dividend % increases from $0.90 million in 1 year to $5.72 million in 5 year.

·     The sales of the company have been increasing with time. For the quarter ending of June 2017, they were 61.73 million USD, for September 2017, they increased to 65.67 million USD, for quarter ending December 2017, it further increased to 69.21 million USD and finally increased to 69.93 million USD in the quarter ending March 2018 and 72.14 million USD in the quarter ending June 2018.

·     The efficiency statistics of the company can be concluded from the company’s asset turnover i.e. 0.12 and revenue/employee i.e. 4,557,931.


Why should you invest in Stag Industrial Inc?

·     Investing in Stag Industrial gives the investors the advantages of real estate investment and also give them the ease, convenience, and benefits of investing in publicly traded stock.

·     REITs disburse 90% or more of their profits to the shareholders in the form of dividends that makes them non-taxable making them an ideal investment for investors.

·     Unlike shares, these are easier to sell or purchase.

·     Stag has proved to offer their investors with dividend-based income, liquidity, portfolio diversification, transparency and protection from inflation.

·     They are considered to be safer and require little money to begin with.

·     The company involves multiple investment opportunities that give the investor a diverse portfolio and reduce the risks on the part of the investor.

·     With Stag, the investors can invest and enjoy the sweet results of real estate investment without the hassle of being a landlord. There are less obligations, and all you have to do is provide the capital for the investment, and let professionals do their job of bringing income for you.


How do you buy stocks of REITs?

REITs function just like stocks and the public listed ones are traded on the US stock exchanges every day. There are also public, non-traded ones that are registered with the SEC but less liquid than the prior and may constitute of a minimum holding period. Private REITs are registered with SEC nor are listed on NSEs and are typically sold to institutional investors such as pension funds. You can also invest in REITs through a REIT ETF or mutual funds through which you can use your money to buy a basket of REIT stocks.


How do you make money off REITs?

When you invest in a REIT, the total return that you may get comprises of two parts, dividends and share price appreciation. Also, make sure to keep in mind that the highest yield may not ensure higher returns on your investment over time. It’s best to go for the average yield REITs as they are more likely to have price appreciations and give you higher long-term returns. So, choose your REIT wisely and invest in Stag Inc to earn enough money with minimum risks involved.

Back to articles Date Posted: Tuesday 28th August 2018 Author: Julian