Alpine announced its Q3 2023 results during an earnings call, revealing that investments during the quarter totaled $27.2 million, with a significant portion in net lease acquisitions and loan investments. The company also engaged in a strategic asset recycling program and a share repurchase initiative. Despite these efforts, the company reported a decrease in third-quarter FFO and AFFO compared to the same period in 2022.
Key takeaways from the call:
- Alpine invested $27.2 million during the quarter, including $19.4 million in net lease acquisitions and a $7.8 million loan investment.
- The company disposed of assets worth $20.6 million during the quarter.
- Alpine engaged in a strategic asset recycling program, selling eight properties and generating total gains of $2.6 million.
- Year-to-date, the company invested $87 million at a 7.5% initial yield, with 61% of acquired base rents coming from investment-grade credit-rated tenants.
- The company sold 22 properties for $100 million, generating gains of $7.8 million.
- The portfolio was 99% occupied, consisting of 138 properties totaling 3.9 million square feet.
- Third-quarter FFO was $0.37 per share, a 7.5% decrease compared to the same quarter in 2022, while third-quarter AFFO was $0.38 per share, a 9.5% decrease over the same period.
- The company adjusted its full-year 2023 FFO and AFFO guidance ranges to $1.45 to $1.47 per share and $1.46 to $1.48 per share, respectively.
- Alpine bought back nearly $5 million of common stock during the quarter.
According to InvestingPro data, Alpine's market cap stands at $234.25M USD, with a P/E ratio of 27.55. The company's revenue for LTM2023.Q3 is $45.67M USD, marking a growth of 6.01%. The company's Gross Profit Margin for LTM2023.Q3 stands at 86.92% and it has an operating income of $7.84M USD.
During the call, the company expressed confidence in the performance of its portfolio, citing that nearly two-thirds of rents come from investment-grade rated tenants. The company also mentioned its asset recycling strategy, derisked balance sheet, and opportunistic share repurchase program, indicating a strong position for 2024.
In response to questions, the company stated its intention to be net buyers in 2024 and discussed its capital deployment plans for the fourth quarter, including stock buybacks, debt reduction, and asset sales. They also provided details on tenant bankruptcies and Kohl's (NYSE:KSS) acquisition, as well as their outlook on future opportunities and pricing in the market.
Alpine's focus remains on investing in tenants with transparent financials and looking to exit opportunistic investments if the market offers appropriate pricing. The company's goal is to reduce leverage to achieve a lower spread on its debt by year-end. Despite a tepid market, Alpine anticipates more properties coming on the market and mentioned a widening spread between investment grade and non-investment grade cap rates.
InvestingPro Tips suggests that Alpine's revenue growth has been slowing down recently and net income is expected to drop this year. Analysts do not anticipate the company will be profitable this year. However, the company's liquid assets exceed short-term obligations and it has been profitable over the last twelve months. Alpine has raised its dividend for 4 consecutive years and is currently trading near its 52-week low. These insights, along with many more, can be found on the InvestingPro platform.
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