STAG Industrial: A Monthly Dividend REIT Worth Watching Despite Recent Decline

STAG Industrial is a REIT focused on owning and operating industrial properties in the US. Despite the challenging market environment, the company's financials remain stable, with a focus on dividend payments. The stock has declined in the past year, but its monthly dividend offers an attractive yield for investors seeking stable income.

STAG Industrial Inc. (STAG) reported robust financial performance for the second quarter of 2025, with earnings per share (EPS) of $0.27, surpassing the forecast of $0.25. Revenue exceeded expectations at $207.59 million compared to the anticipated $206.43 million. Despite these positive results, the stock saw a slight decline of 0.53% in premarket trading, closing at $35.53. Moody’s upgraded STAG’s credit rating to BAA2, reflecting the company’s strong financial health [1].

Key Takeaways

- Earnings Beat: STAG’s EPS of $0.27 exceeded the forecast by 8%.
- Revenue Growth: Revenue reached $207.59 million, exceeding projections.
- Stock Price: Despite positive earnings, the stock price fell by 0.53% in premarket trading.
- Leasing Activity: Strong leasing activity commenced, with 4.2 million square feet of new leases.
- Credit Rating: Moody’s upgraded STAG’s credit rating to BAA2.

Financial Highlights

- Revenue: $207.59 million, up from the forecast of $206.43 million.
- Earnings per share: $0.27, an 8% surprise over the expected $0.25.
- Core FFO per share: $0.53, a 3.3% increase year-over-year.
- Liquidity: $961 million available.

Market Reaction

Despite the positive earnings surprise, STAG’s stock price fell by 0.53% in premarket trading. According to InvestingPro’s Fair Value analysis, the stock appears slightly overvalued at current levels. Trading at a P/E ratio of 26.58, the stock remains within its 52-week range of $28.61 to $41.63, with analyst targets suggesting up to 7% potential upside. The company maintains an attractive 4.17% dividend yield, significantly above the market average.

Outlook & Guidance

STAG updated its guidance, projecting Core FFO per share of $2.48 to $2.52 for the year. The company anticipates a retention rate of 75% and expects cash leasing spreads to remain robust at 23-25%. With ongoing development projects and a strong leasing pipeline, STAG is positioned for continued growth.

Risks and Challenges

Market-specific challenges in Indianapolis and Columbus may impact future performance. Short-term uncertainties in border markets like El Paso could affect leasing activity. Potential macroeconomic pressures may influence investor sentiment and operational costs.

Executive Commentary

CEO Bill Crooker noted the improving acquisition market and the company’s strong cash flow. CFO Matt Sinnard highlighted the company’s low leverage and robust liquidity position.

Q&A

During the earnings call, analysts inquired about the acquisition market and future bond issuance plans. STAG’s management noted a narrowing bid-ask spread and the potential for public bond issuance within the next 12 months, reflecting strategic financial planning.

References

[1] https://www.investing.com/news/transcripts/earnings-call-transcript-stag-industrials-q2-2025-earnings-beat-estimates-stock-dips-93CH-4160791