Essential Properties Realty TrustNYSE: EPRT

Essential Properties Realty Trust, Inc. (EPRT) Q3 2024 Earnings Call Transcript

The headline numbers for Essential Properties (EPRT) give insight into how the company performed in the quarter ended September 2024, but it may be worthwhile to compare some of its key metrics to Wall Street estimates and the year-ago actuals.

Essential Properties (EPRT) came out with quarterly funds from operations (FFO) of $0.43 per share, missing the Zacks Consensus Estimate of $0.44 per share. This compares to FFO of $0.42 per share a year ago.

Evaluate the expected performance of Essential Properties (EPRT) for the quarter ended September 2024, looking beyond the conventional Wall Street top-and-bottom-line estimates and examining some of its key metrics for better insight.

EPRT leads the net lease sector due to its unique business model focusing on middle-market, sale-leaseback transactions, and proactive risk management. Essential Properties' low cost of equity, cheap debt, and low AFFO payout ratio enable it to maximize investment spreads and outperform competitors. Despite its low dividend yield, EPRT's total return is strong, driven by sale leasebacks to middle market tenants.

Essential Properties Realty Trust impresses with a solid business model, strong tenant relationships, and prudent management, making it an attractive long-term investment. EPRT's diversified tenant base, long lease durations, and consistent rent escalations ensure steady income and growth, even in challenging economic environments. The company's focus on sale-leaseback deals provides elevated cash yields and supports strong tenant relationships, contributing to a near-perfect occupancy rate.

EPRT boasts top-tier business metrics, including 99.8% occupancy, 14.1-year average lease term, and strong tenant diversification, ensuring cash flow stability and predictability. Despite high interest rates, EPRT secured $582.7m in investments in Q1-Q2 2024, demonstrating robust investment activity with attractive cap rates. EPRT's safe financing structure features 100% fixed-rate debt, no maturities until 2027, and a $600m undrawn credit facility, limiting interest rate impact.

PRINCETON, N.J.--(BUSINESS WIRE)--Essential Properties Realty Trust, Inc. (NYSE: EPRT; “Essential Properties” or the “Company”) announced today that the Company will release its operating results for the third quarter ended September 30, 2024, after the market close on Wednesday, October 23, 2024. The Company will host its third quarter 2024 earnings conference call and audio webcast on Thursday, October 24, 2024, at 10:00 a.m. Eastern Time to discuss its operating results. A webcast of the con.

Essential Properties Realty Trust focuses on mid-market properties with smaller, non-investment grade tenants, offering higher growth potential and better cap rates despite increased risk. EPRT demonstrates strong fundamentals with low leverage, high diversification, and consistent FFO and dividend growth, despite being a relatively new company. EPRT's valuation is slightly higher than peers due to its growth prospects, lower debt levels, and healthy dividend payout.