STORE Capital (STOR) Tops Q4 EPS by 4c, Revenues Beat; Affirms FY19 Outlook

STORE Capital (NYSE: STOR) reported Q4 EPS of $0.26, $0.04 better than the analyst estimate of $0.22. Revenue for the quarter came in at $146.7 million versus the consensus estimate of $135.71 million.

• Total revenues of $146.7 million
• Net income of $56.6 million, or $0.26 per basic and diluted share, including an aggregate net gain of $14.7 million on dispositions of real estate
• AFFO of $103.4 million, or $0.48 per basic and diluted share
• Declared a regular quarterly cash dividend per common share of $0.33
• Invested $460.0 million in 75 properties at a weighted average initial cap rate of 8.0%
• Raised net proceeds of $268.1 million from the sale of an aggregate of 9.2 million common shares under the Company’s at-the-market equity program
• Issued $592.0 million of long-term fixed-rate notes, which included the inaugural issuance of $378 million of AAA rated notes, under STORE’s Master Funding debt program in October 2018

Management Commentary

“STORE posted new records in all key performance metrics in 2018, including real estate investment activity, AFFO and AFFO per share. We also delivered our fourth consecutive year of double-digit returns to our stockholders, in part due to our fourth dividend increase in as many years,” said Christopher Volk, Chief Executive Officer of STORE Capital. “During the year, we acquired 418 properties for a total of $1.63 billion at sector leading average investment yields of 7.9%, further diversifying our tenant base to 434 customers across the United States. From a capital markets perspective, we strengthened our financing flexibility and reduced our cost of capital with the successful completion of our inaugural public unsecured note offering, together with the first-ever AAA rated real estate master funding issuance. In 2019, we look forward to building on these accomplishments to achieve another year of record financial performance that contributes to continued success for all of our stakeholders.”

2019 Guidance

Affirming its 2019 guidance initially presented in November 2018, the Company currently expects 2019 AFFO per share to be within a range of $1.90 to $1.96, based on projected 2019 annual real estate acquisition volume, net of projected property sales, of approximately $1.1 billion. This AFFO per share guidance equates to anticipated net income, excluding gains or losses on sales of property, of $0.88 to $0.91 per share, plus $0.96 to $0.98 per share of expected real estate depreciation and amortization, plus approximately $0.06 to $0.07 per share related to noncash items. The midpoint of our AFFO per share guidance is based on a weighted average initial cap rate on new acquisitions of 7.85% and target leverage in the range of 5½ to 6 times run-rate net debt to EBITDA. AFFO per share is sensitive to the timing and amount of real estate acquisitions, property dispositions and capital markets activities during the year, as well as to the spread achieved between the lease rates on new acquisitions and the interest rates on borrowings used to finance those acquisitions.

For earnings history and earnings-related data on STORE Capital (STOR) click here.

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