Breaking Down W. P. Carey Inc. (WPC) Financial Health: Key Insights for Investors

Are you looking for a reliable real estate investment trust (REIT) to add stability to your portfolio? Have you considered W. P. Carey Inc. (WPC)? As of the fiscal year 2024, this company reported total revenues of $1.79 billion and net income of $388.4 million. But how sustainable are these figures, and what do they really tell us about WPC's financial health? Dive in to explore key metrics, analyze their balance sheet, and understand the factors driving their performance, providing you with the insights needed to make informed investment decisions.

W. P. Carey Inc. (WPC) Revenue Analysis

W. P. Carey Inc. operates as a net-lease real estate investment trust (REIT). Understanding its revenue streams involves examining the sources and how they've changed over time.

The primary revenue source for W. P. Carey is rental revenue from its diversified portfolio of properties. These properties are leased to a wide variety of tenants under long-term net-lease agreements, where tenants are responsible for property taxes, insurance, and maintenance. This structure provides a consistent and predictable income stream.

W. P. Carey's revenue streams can be broken down as follows:

• Rental Revenue: The bulk of W. P. Carey's income comes from the rent paid by tenants occupying its properties.
• Reimbursements: W. P. Carey also receives reimbursements from tenants for certain operating expenses.
• Other Income: This may include income from property management and other services.

Analyzing year-over-year revenue growth provides insights into the company's performance and stability. Here's what we can observe regarding W. P. Carey's financial performance:

According to the latest available information, W. P. Carey's total revenue for the year 2023 was reported at $1.48 billion. This represents a 13.44% increase over the previous year's revenue of $1.305 billion. Looking back further, in 2021, the company recorded $1.24 billion in revenue, showcasing a consistent upward trend. The gross profit for 2023 stood at $1.26 billion, reflecting a 13.39% increase compared to the $1.11 billion reported in 2022. In 2021, the gross profit was $1.05 billion.

Below is a table summarizing W. P. Carey's recent financial performance:

Significant changes in revenue streams may arise from property acquisitions, dispositions, lease renewals, and market conditions. For example, strategic acquisitions can boost rental income, while property sales may lead to a temporary decrease. Lease renewals at higher rates can also positively impact revenue.

For additional insights into W. P. Carey Inc.'s financial health, you can explore: Breaking Down W. P. Carey Inc. (WPC) Financial Health: Key Insights for Investors

W. P. Carey Inc. (WPC) Profitability Metrics

Assessing the financial health of W. P. Carey Inc. (WPC) requires a detailed examination of its profitability metrics. Key indicators such as gross profit, operating profit, and net profit margins provide insights into the company's efficiency in generating earnings. Analyzing these metrics over time helps identify trends and potential areas of concern or improvement. Furthermore, comparing WPC's profitability ratios with industry averages offers a benchmark for evaluating its performance relative to its peers.

Here's a breakdown of key profitability metrics for W. P. Carey Inc. based on available data:

• Gross Profit: Gross profit is calculated as revenue less the cost of goods sold (COGS). It indicates how efficiently a company uses its labor and supplies to produce and sell products or services.
• Operating Profit: Operating profit is calculated as gross profit less operating expenses. It reflects the profit earned from a company's core business operations before interest and taxes.
• Net Profit: Net profit is calculated as operating profit less interest, taxes, and other expenses. It represents the actual profit earned by a company after all expenses have been paid.
• Profit Margins: Profit margins are profitability ratios that measure a company's profit relative to its revenue. Common profit margins include gross profit margin, operating profit margin, and net profit margin.

For the fiscal year 2024, W. P. Carey Inc. reported the following financial highlights:

• Total Revenue:$1.37 billion
• Net Income:$378.1 million, or $1.77 per diluted share
• Adjusted Funds From Operations (AFFO):$632.8 million, or $2.96 per diluted share

A closer look at operational efficiency reveals how well W. P. Carey Inc. manages its costs and maintains its gross margin. Trends in these areas can highlight strengths or weaknesses in the company's operational strategies.

In 2024, W. P. Carey Inc. executed $1.3 billion in investments, demonstrating its commitment to growth and strategic capital allocation.

To provide a clearer picture, below is a summary of W. P. Carey Inc.'s financial performance:

These figures provide a snapshot of W. P. Carey Inc.'s financial health and operational efficiency, crucial for investors assessing the company's potential and stability. More information on W. P. Carey Inc. (WPC) can be found here: Exploring W. P. Carey Inc. (WPC) Investor Profile: Who’s Buying and Why?

W. P. Carey Inc. (WPC) Debt vs. Equity Structure

Understanding how W. P. Carey Inc. (WPC) finances its growth involves analyzing its debt and equity mix. This section provides an overview of WPC's debt levels, its debt-to-equity ratio, recent debt-related activities, and how the company balances debt and equity financing.

As of December 31, 2024, W. P. Carey's financial structure includes:

• Long-Term Debt: $7.984 billion, a 3.14% increase from 2023.
• Short-Term Debt: $0 million.

The company's debt-to-equity ratio, a key indicator of financial leverage, was 0.95 as of December 31, 2024. This ratio reflects the proportion of debt used to finance assets relative to equity.

Here's a look at the debt-to-equity ratio trend:

• 2023 Average: 0.86, a 3.61% increase from 2022.
• 2022 Average: 0.83, a 7.78% increase from 2021.
• 2021 Average: 0.90, a 1.1% decrease from 2020.

Recent debt-related activities include:

• November 2024: Issued €600.0 million of 3.700% Senior Unsecured Notes due 2034.
• Subsequent to Quarter End: Repaid $450 million of 4.0% Senior Unsecured Notes due February 2025.
• June 2024: Priced a $400 million public offering of 5.375% Senior Unsecured Notes due 2034.

W. P. Carey maintains investment-grade credit ratings, with a BBB+ from S&P Global Ratings and Baa1 from Moody's. This allows the company favorable access to the debt market.

The company's capitalization as of December 31, 2024, is detailed below:

Leverage metrics as of December 31, 2024, include:

• Pro Rata Net Debt / Adjusted EBITDA: 5.5x
• Pro Rata Net Debt / Enterprise Value: 38.7%
• Total Consolidated Debt / Gross Assets: 41.6%

W. P. Carey's approach includes balancing debt financing with equity funding. The company targets maintaining leverage in the mid-to-high 5s Net Debt to EBITDA range. With solid access to capital and a healthy balance sheet, WPC is well-positioned to capitalize on potential opportunities. As of December 31, 2024, the company had a total liquidity of $2.6 billion, including around $1.9 billion of available capacity under its senior unsecured credit facility and $640.4 million of cash and cash equivalents.

To delve deeper into W. P. Carey Inc.'s (WPC) financial well-being, check out: Breaking Down W. P. Carey Inc. (WPC) Financial Health: Key Insights for Investors

W. P. Carey Inc. (WPC) Liquidity and Solvency

Liquidity and solvency are crucial indicators of a company's financial health, revealing its ability to meet short-term obligations and sustain long-term operations. For W. P. Carey Inc. (WPC), a real estate investment trust (REIT), these metrics offer insights into its operational efficiency and financial stability.

Assessing W. P. Carey Inc.'s Liquidity:

Analyzing W. P. Carey Inc.'s liquidity involves examining its current and quick ratios, working capital trends, and cash flow statements. These components provide a comprehensive view of the company's ability to cover its short-term liabilities with its current assets.

• Current and Quick Ratios: These ratios measure a company's ability to pay off its short-term liabilities with its current assets. The current ratio includes all current assets, while the quick ratio excludes inventory, focusing on the most liquid assets.
• Analysis of Working Capital Trends: Monitoring the trend of working capital (current assets minus current liabilities) helps identify whether a company's short-term financial health is improving or deteriorating.
• Cash Flow Statements Overview: A review of the cash flow statements, specifically operating, investing, and financing cash flows, indicates how well a company generates cash from its operations and manages its investments and funding.

For the fiscal year 2024, W. P. Carey Inc. reported several key figures that reflect its liquidity position. The company's cash and cash equivalents stood at $163.2 million. Additionally, the total revenue for 2024 was $1.49 billion. These figures provide a snapshot of the resources available to W. P. Carey Inc. for meeting its immediate financial obligations.

The cash flow statement for 2024 reveals further details:

• Net cash from operations: $1.15 billion
• Net cash used for investing activities: $345.2 million
• Net cash used for financing activities: $778.4 million

These cash flow activities show that W. P. Carey Inc. generates substantial cash from its operations, which is then allocated to investing and financing activities. The investing activities primarily involve property acquisitions and improvements, while financing activities include dividend payments and debt management.

Potential Liquidity Concerns or Strengths:

W. P. Carey Inc.'s substantial cash flow from operations is a significant strength, indicating a robust ability to generate cash from its core business activities. This cash flow supports its dividend payouts and investments in new properties. However, the company also has significant debt obligations, which could pose a liquidity risk if not managed carefully. As of December 31, 2024, the company's total debt was $5.34 billion with a weighted average interest rate on fixed-rate debt of 3.9% and a weighted average term to maturity of 4.3 years. A manageable debt maturity schedule and staggered debt profile are in place to mitigate these risks.

Here is an overview of W. P. Carey's debt maturity schedule:

Interested in learning more about the investors behind W. P. Carey Inc. (WPC)? Check out this insightful article: Exploring W. P. Carey Inc. (WPC) Investor Profile: Who’s Buying and Why?

W. P. Carey Inc. (WPC) Valuation Analysis

Determining whether W. P. Carey Inc. (WPC) is overvalued or undervalued requires a multifaceted approach, considering various financial ratios, stock performance, and analyst sentiment. Here's a breakdown of key valuation metrics:

• Breaking Down W. P. Carey Inc. (WPC) Financial Health: Key Insights for Investors

Price-to-Earnings (P/E) Ratio:

As of April 17, 2025, W. P. Carey's P/E ratio is approximately 29.75. This is calculated using the latest stock price of $62.17 and the earnings per share (EPS) for the trailing twelve months (TTM) ending December 2024, which is $2.09. The average P/E ratio for WPC over the past 5 years is 25.81. Over the last ten years, the average PE ratio of W. P. Carey has been 28.01. The current 29.75 P/E ratio is 6% higher than the historical average. The highest quarterly P/E ratio in the last ten years has been 44.97 and it was in the Dec 2019 quarter.

Price-to-Book (P/B) Ratio:

The current price/book ratio as of April 15, 2025 is 1.57. The average price/book ratio for 2024 was 1.4, a 0.72% increase from 2023.

Enterprise Value-to-EBITDA (EV/EBITDA) Ratio:

As of April 11, 2025, the EV/EBITDA ratio for W. P. Carey is 15.85. This is derived from an enterprise value of $19,827.94 million and a TTM EBITDA of $1,251.24 million. The latest twelve months EV / EBITDA is 16.0x. W. P. Carey's EV / EBITDA for fiscal years ending December 2020 to 2024 averaged 16.9x.

Stock Price Trends:

Over the last 12 months, W. P. Carey's stock price has increased by approximately 16.18%. The stock price as of April 17, 2025 was $62.17, a 1.45% increase from the previous day.

Dividend Yield and Payout Ratio:

The current dividend yield for W. P. Carey as of April 10, 2025, is 5.83%. Another source shows the dividend yield is 5.73%. The annual dividend is $3.56 per share. The payout ratio is relatively high at 166.03%, which means the company is paying out more in dividends than it earns. As of December 2024, the dividend payout ratio was 5.64.

Analyst Consensus:

Based on ratings from 9 Wall Street analysts, the consensus rating for W. P. Carey is 'Hold'.

The analyst community's 12-month price targets show:

• Average: $63.75
• High: $68.00
• Low: $60.00

This suggests a potential upside of approximately 2.52% from the current price of $62.18.

W. P. Carey Inc. (WPC) Risk Factors

W. P. Carey Inc. (WPC) faces a variety of risks that could impact its financial health. These risks span internal operational challenges and external market dynamics. Understanding these factors is crucial for investors assessing the company's stability and future performance. For more in-depth analysis, consider reading Breaking Down W. P. Carey Inc. (WPC) Financial Health: Key Insights for Investors.

Here's a look at some key risks:

• Market and Economic Risks: Changes in economic conditions, such as rising interest rates or recession, can impact property values and rental income. A decrease in demand for commercial properties could lead to higher vacancy rates and lower lease rates.
• Tenant Creditworthiness: W. P. Carey's financial health is closely tied to the ability of its tenants to meet their lease obligations. Economic downturns or industry-specific challenges can increase the risk of tenant defaults, impacting rental revenues.
• Interest Rate Risk: As a REIT, W. P. Carey relies on debt financing. Fluctuations in interest rates can increase borrowing costs, affecting profitability and cash flow.
• Competition: The real estate market is competitive. Other REITs and real estate investors compete for properties and tenants, which can put pressure on lease rates and occupancy levels.
• Regulatory and Legal Risks: Changes in regulations, such as tax laws or environmental regulations, can impact the company's operations and financial performance.

To provide a clearer picture, here's a summary of potential risks based on recent filings and reports:

W. P. Carey actively employs several mitigation strategies to address these risks. These may include:

• Diversification: Diversifying its portfolio across different property types, geographic locations, and industries reduces the risk of over-reliance on any single factor.
• Long-Term Leases: Utilizing long-term leases with built-in rent escalations provides a stable income stream and protects against inflation.
• Due Diligence: Conducting thorough due diligence on potential acquisitions and tenant creditworthiness minimizes the risk of bad investments and tenant defaults.
• Hedging: Employing hedging strategies to manage interest rate and currency exchange rate risks.
• Proactive Asset Management: Regularly monitoring and maintaining properties to prevent unexpected costs and ensure tenant satisfaction.

While these strategies help mitigate potential risks, it's essential for investors to stay informed about the challenges W. P. Carey faces and how the company is addressing them.

W. P. Carey Inc. (WPC) Growth Opportunities

W. P. Carey Inc. (WPC) is poised for future growth through several key strategies. These include a focus on sale-leaseback transactions, which allow companies to unlock capital from their real estate assets, and strategic acquisitions in high-growth sectors such as industrial and warehouse properties. The company also benefits from its diversified portfolio across various property types and geographic locations, reducing its reliance on any single sector or region.

Analyzing W. P. Carey Inc.'s (WPC) growth drivers reveals several factors contributing to its potential. Product innovations, in the context of a real estate investment trust (REIT), refer to the development of specialized investment products and services tailored to meet specific client needs. Market expansions involve extending the company's presence into new geographic areas or property types. Acquisitions of properties or portfolios that align with WPC's investment strategy can also drive growth.

While specific future revenue growth projections and earnings estimates are subject to market conditions and company performance, analysts generally expect W. P. Carey Inc. (WPC) to maintain a steady growth trajectory. This expectation is based on the company's historical performance, its strong balance sheet, and its ability to capitalize on opportunities in the commercial real estate market. For instance, in the fiscal year 2024, W. P. Carey reported AFFO per share of $5.26. The company's diversified portfolio and active asset management are expected to support continued revenue and earnings growth.

Strategic initiatives and partnerships play a crucial role in W. P. Carey Inc.'s (WPC) growth strategy. These may include forming joint ventures with other real estate investors, partnering with tenants on development projects, or collaborating with industry experts to identify emerging trends and opportunities. Such collaborations can enhance WPC's ability to source and execute attractive investment opportunities.

W. P. Carey Inc. (WPC) possesses several competitive advantages that position it favorably for future growth. Its long-standing reputation as a reliable and experienced net-lease REIT provides a strong foundation for attracting tenants and investors. The company's disciplined investment approach, which emphasizes thorough due diligence and risk management, helps to ensure the quality and stability of its portfolio. Additionally, its diversified portfolio reduces its vulnerability to economic downturns in specific sectors or regions.

Here are some of the competitive advantages that position the company for growth:

• Diversified Portfolio: Spreads risk across various property types and geographic locations.
• Sale-Leaseback Expertise: Specializes in structuring sale-leaseback transactions that benefit both WPC and its tenants.
• Disciplined Investment Approach: Emphasizes thorough due diligence and risk management.
• Strong Balance Sheet: Provides financial flexibility to pursue attractive investment opportunities.

More information about W. P. Carey Inc. (WPC) financial health can be found here: Breaking Down W. P. Carey Inc. (WPC) Financial Health: Key Insights for Investors