Shares of STORE Capital (STOR) - Get STORE Capital Corporation Report are up 8% this year, even as the S&P 500 and iShares US Real Estate ETF (IYR) - Get iShares U.S. Real Estate ETF Report are down around 10%. The REIT's CEO Christopher Volk said the outperformance is largely due to the company's ability to grow, even in a tough environment.
"Last year we increased our dividend by 8%, we increased our balance sheet by 30%," said Volk. "We've been filling a need and our estimates for 2016 were solid, showing further growth."
STORE Capital is an internally managed net-lease real estate investment trust (REIT) that specializes in the acquisition, investment and management of Single Tenant Operational Real Estate.
STORE recently reported preliminary fourth quarter and full year 2015 results that helped boost its shares. The company will officially release its results on Feb. 22. The company said its real estate investment portfolio grew from $2.8 billion in gross investments, representing 947 property locations, on Dec. 31, 2014 to approximately $4 billion in gross investments, representing more than 1,300 property locations, as of Dec. 31, 2015. STORE Capital is currently yielding 4.3%.
"We have a really well protected dividend, one of the best in the space," said Volk.
Volk said the sale-leaseback arrangements it offers are a smarter choice for free-standing businesses like restaurants or medical offices -- or even a large retail chain like Macy's (M) - Get Macy's Inc Report -- because they offer the proprietor more flexibility and a better cost of capital to make more money.
Last week STORE's primary stockholder Oaktree Capital sold 12 million shares of the stock at $23 per share in order to reduce its position. The stock remains above that sale price (closing at $25.16 on Tuesday) and the result is that the Oaktree will have two fewer seats on the company's board of directors.
Finally, Volk said, "flat is the new up" in the current marketplace, which is making REITs like STORE Capital even more attractive to investors.