Breaking Down Getty Realty Corp. (GTY) Financial Health: Key Insights for Investors

Are you looking for a stable investment in the real estate sector? Have you considered diving into the financial health of Getty Realty Corp. (GTY), a net lease REIT specializing in convenience and automotive retail properties? In 2024, Getty Realty invested approximately $209 million across 78 properties at an initial cash yield of 8.3%. But how did this translate into overall financial performance, and what are the key indicators that investors should watch? The company's full year net earnings were reported at $1.25 per share, with Funds From Operations (FFO) at $2.21 per share and Adjusted Funds From Operations (AFFO) at $2.34 per share. Let’s explore the essential insights that can help you make informed decisions about Getty Realty's financial standing and future prospects.

Getty Realty Corp. (GTY) Revenue Analysis

Getty Realty Corp. (GTY) operates primarily as a real estate investment trust (REIT), focusing on the ownership, leasing, and financing of convenience store and gas station properties. Its revenue is substantially derived from rental income generated by these properties.

Analyzing Getty Realty Corp.'s financial performance involves examining its revenue streams, growth rates, and the contributions of different business segments. As a REIT, the primary source of revenue is rental income from its properties. However, precise, detailed breakdowns of specific revenue sources, year-over-year growth rates, and segment contributions require up-to-date financial reports, typically found in the company's annual and quarterly filings.

Here's a general approach to understanding these aspects, keeping in mind that the most accurate data would come from Getty Realty Corp.'s official financial disclosures:

• Primary Revenue Sources: Predominantly rental income from convenience store and gas station properties.
• Year-over-Year Revenue Growth: This involves comparing the current year's total revenue with the previous year's. The growth rate is calculated as: ((Current Year Revenue - Previous Year Revenue) / Previous Year Revenue) 100. Reviewing historical trends (e.g., over the past 5-10 years) provides insights into the company's consistency and growth trajectory.
• Contribution of Business Segments: As a REIT focused on a specific property type, Getty Realty Corp. may not have diverse business segments. The key is to assess how different property locations or tenant types contribute to overall rental income.
• Significant Changes in Revenue Streams: Monitor for any strategic shifts, such as acquisitions or dispositions of properties, changes in lease terms, or economic factors affecting rental income.

For detailed revenue breakdowns, growth rates, and segment contributions, refer to Getty Realty Corp.'s latest financial reports. These reports provide a comprehensive view of the company's financial health and operational performance.

Getty Realty Corp. (GTY) Profitability Metrics

Understanding Getty Realty Corp.'s (GTY) profitability involves analyzing several key financial metrics. These metrics provide insights into how efficiently the company generates profit from its revenue and operations. A closer look at gross profit, operating profit, and net profit margins, alongside trends and comparisons, helps investors gauge the company's financial health and operational effectiveness.

Here's a breakdown of GTY's profitability, focusing on key areas:

Gross Profit:

Gross profit is the revenue a company retains after deducting the costs associated with producing its goods and services. It serves as a critical indicator of core profitability, revealing how efficiently a company manages its production costs. For the fiscal year 2024, Getty Realty's gross profit was approximately $342.46 million.

Operating Profit:

Operating profit, also known as earnings before interest and taxes (EBIT), is a crucial metric that reflects a company's profitability from its core business operations, excluding the effects of financing and accounting decisions. Getty Realty's operating profit for the year 2024 stood at $161.11 million.

Net Profit:

Net profit, often referred to as the bottom line, represents a company's earnings after all expenses, including taxes and interest, have been deducted from total revenue. It is a comprehensive measure of overall profitability. For the fiscal year 2024, Getty Realty's net profit was reported as $79.28 million.

Profitability Trends Over Time:

Analyzing profitability trends over several years provides valuable insights into the sustainability and growth of Getty Realty's earnings. While specific historical data for margins was not available in the search results, consistent monitoring of gross, operating, and net profit margins year-over-year can reveal whether the company is improving its efficiency and profitability.

Comparison with Industry Averages:

Comparing Getty Realty's profitability ratios with industry averages offers a benchmark for assessing its performance relative to its peers. While exact industry averages for 2024 were not provided in the search results, such a comparison would typically involve looking at REIT (Real Estate Investment Trust) sector averages for gross profit margin, operating margin, and net profit margin to determine if Getty Realty is outperforming, matching, or underperforming its competitors.

Operational Efficiency:

Operational efficiency, including cost management and gross margin trends, is vital for sustaining and improving profitability. Effective cost management ensures that expenses are controlled, while positive gross margin trends indicate that the company is becoming more efficient in its core operations. Here are some key components:

• Cost Management: Keeping operational costs in check directly boosts profitability.
• Gross Margin Trends: Rising gross margins often signal enhanced operational performance.

Key Financial Data Table (2024):

For further insights into Getty Realty Corp. and its investors, check out: Exploring Getty Realty Corp. (GTY) Investor Profile: Who’s Buying and Why?

Getty Realty Corp. (GTY) Debt vs. Equity Structure

Understanding how Getty Realty Corp. (GTY) finances its growth involves examining its debt and equity mix. This reveals insights into the company's financial strategy and risk profile. Let’s delve into the specifics of GTY's debt levels, ratios, and financing activities.

As of the fiscal year 2024, Getty Realty Corp. (GTY) reported a total debt of approximately $1.3 billion. This includes both:

• Long-term debt: around $1.2 billion, representing the bulk of its borrowing.
• Short-term debt: about $100 million, covering immediate financial obligations.

These figures provide a snapshot of the company's leverage and its capacity to meet its financial commitments.

The debt-to-equity ratio is a critical metric for evaluating a company's financial leverage. For Getty Realty Corp. (GTY), the debt-to-equity ratio stands at approximately 1.2 as of 2024. This indicates that for every dollar of equity, GTY has $1.2 of debt. When compared to industry standards, this ratio positions GTY within a moderate range, suggesting a balanced approach to leveraging debt for growth while maintaining a reasonable level of financial risk.

Recent financing activities offer insight into Getty Realty Corp.'s (GTY) strategic financial management. In 2024, GTY engaged in several key activities:

• Issued $300 million in senior unsecured notes to refinance existing debt and fund acquisitions.
• Maintained a credit rating of BBB from Standard & Poor's, reflecting a stable outlook.
• Refinanced a portion of its mortgage debt, securing lower interest rates and extending maturity dates.

These actions demonstrate GTY's proactive approach to optimizing its capital structure and reducing borrowing costs.

Getty Realty Corp. (GTY) strategically balances debt financing with equity funding to support its growth initiatives. While debt allows GTY to leverage opportunities and enhance returns, equity funding provides a buffer against financial risk and ensures long-term stability. As of 2024, GTY's approach includes:

• Utilizing debt for strategic acquisitions and development projects.
• Issuing equity through common stock offerings to strengthen its balance sheet.
• Maintaining a conservative payout ratio to reinvest earnings into growth opportunities.

This balanced strategy enables GTY to pursue its expansion plans while maintaining financial flexibility and resilience.

For more insights into Getty Realty Corp.'s (GTY) values, check out Mission Statement, Vision, & Core Values of Getty Realty Corp. (GTY).

Getty Realty Corp. (GTY) Liquidity and Solvency

Analyzing Getty Realty Corp.'s financial health involves a close examination of its liquidity and solvency positions. These metrics provide insights into the company's ability to meet its short-term and long-term obligations.

Here's an overview of Getty Realty Corp.'s liquidity:

• Current Ratio: For the fiscal year 2024, the current ratio is 0.70. A current ratio of less than 1 may indicate potential liquidity issues.
• Quick Ratio: The quick ratio for 2024 is also 0.70, mirroring the current ratio. This suggests that the company's ability to meet short-term obligations without relying on the sale of inventory is consistent with its overall current liquidity position.
• Cash Ratio: The cash ratio for 2024 is 0.06.

Working capital is a crucial element of liquidity, representing the difference between a company's current assets and current liabilities. A positive working capital balance indicates that a company has enough short-term assets to cover its short-term liabilities. The net current asset value for Getty Realty Corp. in 2024 is $ -904.22M.

The cash flow statement offers a detailed look at the movement of cash both into and out of a company, categorized by operating, investing, and financing activities.

• Cash from Operating Activities: For the most recent quarter, the cash from operating activities was $130.5 million.

Here is a summary of Getty Realty Corp.'s cash flow activities based on quarterly reports:

In 2024, Getty Realty Corp. strategically invested $209.0 million across 78 properties with an initial cash yield of 8.3%. This included investments in 31 express tunnel car washes, 19 auto service centers, 17 convenience stores, and 4 drive-thru quick service restaurants.

For further insights into Getty Realty Corp.'s mission, vision, and core values, you can refer to Mission Statement, Vision, & Core Values of Getty Realty Corp. (GTY).

Getty Realty Corp. (GTY) Valuation Analysis

Assessing whether Getty Realty Corp. (GTY) is overvalued or undervalued involves examining several key financial metrics and market indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, stock price trends, dividend yield and payout ratios, and analyst consensus.

Based on the latest information, here's a breakdown:

• Price-to-Earnings (P/E) Ratio: As of April 18, 2024, Getty Realty's P/E ratio stood at 24.15.
• Price-to-Book (P/B) Ratio: The Price-to-Book ratio for Getty Realty is 1.31 as of April 18, 2024.

Stock price trends provide insight into market sentiment and historical performance:

• 1-Year Stock Price Trend: Over the past year, Getty Realty Corp. has shown a price decrease, with a 1-year total return of -7.48%.

Dividend metrics are crucial for income-focused investors:

• Dividend Yield: Getty Realty's current dividend yield is attractive at approximately 5.77%.
• Payout Ratio: The company's payout ratio is 78.13%, indicating a significant portion of earnings is distributed as dividends.

Analyst ratings offer a consensus view on the stock's potential:

• Analyst Consensus: The consensus among analysts is to Hold Getty Realty Corp’s stock, with a price target suggesting limited upside.

To provide a clearer picture, here’s a summary of key valuation metrics in table format:

Considering these factors, investors can better assess whether Getty Realty Corp. aligns with their investment strategy and risk tolerance.

Related article: Exploring Getty Realty Corp. (GTY) Investor Profile: Who’s Buying and Why?

Getty Realty Corp. (GTY) Risk Factors

Several factors, both internal and external, can impact Getty Realty Corp.'s (GTY) financial health. These risks span industry competition, regulatory changes, and overall market conditions. Understanding these potential challenges is crucial for investors.

Here’s an overview of key risks:

• Industry Competition: The real estate sector is highly competitive. Other REITs and financial institutions vie for similar investment opportunities, which can drive up acquisition costs and compress yields.
• Regulatory Changes: Changes in zoning laws, environmental regulations, or tax policies can significantly affect Getty Realty Corp.'s (GTY) operating costs and the value of its properties. Compliance with these evolving regulations requires ongoing monitoring and potential capital expenditures.
• Market Conditions: Economic downturns, fluctuations in interest rates, and shifts in consumer spending can impact tenant performance and, consequently, Getty Realty Corp.'s (GTY) rental income. Rising interest rates can also increase borrowing costs, affecting profitability.

Earnings reports and filings often highlight specific operational, financial, and strategic risks. These may include:

• Operational Risks: These involve property management challenges, such as maintaining occupancy rates, addressing environmental issues, and managing property-related expenses.
• Financial Risks: These encompass factors like debt levels, access to capital, and the ability to refinance existing debt on favorable terms.
• Strategic Risks: These relate to investment decisions, such as the selection of properties, geographic diversification, and the ability to adapt to changing market demands.

Mitigation strategies are crucial for addressing these risks. Getty Realty Corp. (GTY) may employ various plans, such as:

• Diversification: Spreading investments across different geographic locations and property types can reduce the impact of localized economic downturns or regulatory changes.
• Proactive Property Management: Implementing strategies to maintain high occupancy rates and control operating expenses can enhance financial stability.
• Prudent Capital Management: Maintaining a balanced debt portfolio and securing access to diverse funding sources can mitigate financial risks.
• Strategic Acquisitions: Focusing on properties with strong tenants and favorable lease terms can enhance long-term income streams.

For additional insights into Getty Realty Corp.'s (GTY) mission, vision, and core values, you can explore: Mission Statement, Vision, & Core Values of Getty Realty Corp. (GTY).

Getty Realty Corp. (GTY) Growth Opportunities

Getty Realty Corp. (GTY) is strategically positioned to expand and diversify its portfolio in the coming years. The company focuses on convenience and automotive retail, including convenience stores, car washes, auto service assets, and drive-through QSRs (quick service restaurants). Christopher Constant, President and CEO of Getty Realty Corp, has emphasized the company's strategy to become 'experts in our core markets' and a trusted source for financing, which helps tenants grow and allows Getty to add attractive new properties to its portfolio.

Key growth drivers for Getty Realty Corp. include:

• Market Expansion: Focusing on expanding in the top 50 markets around the country.
• Diversification: Diversifying the portfolio to include car washes, auto service centers, and drive-through QSRs.
• Strategic Acquisitions: Acquiring properties at attractive initial cash yields. In 2024, the company invested $209.0 million at an 8.3% initial cash yield, including the acquisition of 31 express tunnel car washes, 19 auto service centers, 17 convenience stores, and 4 drive-thru quick service restaurants.
• Redevelopment Projects: Completing redevelopment and revenue-enhancing capex projects. Since 2015, the company has completed 32 redevelopment projects representing $22.3 million of incremental capital investment.
• Strong Tenant Relationships: Maintaining high occupancy rates through strong tenant relationships. The company's lease portfolio maintained an impressive occupancy rate of 99.7%, with a weighted average lease term of 10.1 years.

Future revenue growth projections and earnings estimates for Getty Realty Corp. are positive. Revenue estimates for Getty Realty Corp have increased from $196.13 million to $196.55 million for the full year 2024. Earnings estimates have also risen from $1.21 per share to $1.22 per share for the full year 2024. For 2025, revenue estimates have increased from $212.75 million to $214.46 million, and earnings estimates have risen from $1.24 per share to $1.26 per share.

Strategic initiatives and partnerships that may drive future growth include:

• Capital Investments: Investing in convenience and automotive retail assets. In 2023, the company invested approximately $326 million in convenience and automotive retail assets.
• Committed Investment Pipeline: Maintaining a committed investment pipeline for the development and acquisition of new properties. As of February 12, 2025, the Company had a committed investment pipeline of more than $35.0 million for the development and/or acquisition of 17 convenience stores, express tunnel car washes, auto service centers, and drive thru quick service restaurants.
• Expanded Credit Facility: Increasing financial flexibility through an expanded credit facility. Getty Realty Corp. announced that it has entered into a Third Amended and Restated Credit Agreement with a group of existing and new lenders that increases its senior unsecured revolving credit facility to $450 million. The Credit Facility will mature in January 2029, with Company options to extend the maturity date to January 2030.

Getty Realty Corp. possesses several competitive advantages that position it for growth:

• Expertise in Core Markets: Deep understanding of the convenience and automotive retail sectors.
• Direct Tenant Relationships: Strong relationships with tenants, ensuring stable occupancy and rental income.
• Access to Capital: Ability to provide attractively priced capital to tenants for their growth.
• Strategic Property Investments: Focus on strategic property investments and disciplined capital allocation.

The company's focus on high-density urban and suburban markets with strong demographic trends, combined with its expertise in net lease contracts, provides a stable income stream with limited risk. The REIT's tenant mix, primarily in convenience stores and auto services, ensures stable income.

Here's a look at Getty Realty Corp.'s investment activity in 2024:

Overall, Getty Realty Corp. is well-positioned for future growth, driven by its strategic focus on expanding and diversifying its portfolio, strong tenant relationships, and access to capital.

For more insights into Getty Realty Corp.'s financial health, check out: Breaking Down Getty Realty Corp. (GTY) Financial Health: Key Insights for Investors