What drove PSTL's earnings growth in the past year?

Postal Realty Trust Inc (PSTL) achieved strong earnings growth in the past year, driven by several key factors:

1. Strategic Acquisitions: PSTL's aggressive acquisition strategy was a significant contributor to its financial performance. In 2024, the company acquired 197 properties for $91 million at a weighted average cap rate of 7.6%. This robust acquisition activity expanded its property portfolio and contributed to increased rental income.
2. Occupancy and Lease Retention Rates: The company maintained a high occupancy rate of 99.8% and a lease retention rate of 99% with the postal service over the past decade. This consistent occupancy rate ensured a stable revenue base, which supported earnings growth.
3. Dividend Growth: PSTL announced a quarterly dividend increase to $0.25 per share, marking the seventh consecutive year of dividend growth. This not only enhanced shareholder returns but also reflected the company's financial stability and confidence in its cash flow generation.
4. AFFO Growth: The company reported a strong Adjusted Funds from Operations (AFFO) per share of $1.16 for 2024, marking an 8.4% increase year-over-year. This exceeded street consensus by over 9%, indicating strong operational performance and cash flow generation.
5. Financial Flexibility: PSTL's ability to increase its term loan commitments by $50 million and expand its term loan accordion by another $50 million highlighted strong lender support. This financial flexibility allowed the company to capitalize on growth opportunities without straining its balance sheet.

In summary, PSTL's earnings growth in the past year was driven by strategic acquisitions, high occupancy rates, dividend growth, strong AFFO growth, and financial flexibility, which collectively supported robust earnings performance.