W. P. Carey Inc.

W.P. Carey Inc. (WPC) is a publicly traded real estate investment trust (REIT) that provides long-term sale-leaseback and build-to-suit financing for companies worldwide and manages an investment portfolio of approximately $13.7 billion. The company was founded in 1973 by William Polk Carey, who died in 2012 at the age of 81.

W. P. Carey’s portfolio is "diversified by geography, property type and industry so that overall performance may not be impacted by any one industry, tenant, property type or region.”

In 2012, WPC converted from an investment company to a REIT. This was not a change in business model, but simply a reclassification for tax purposes. The change coincided with a merger with an affiliated company. The result was an increase in the September 28, 2012 quarterly dividend from $.567 to $.65.  The dividend was raised again in December, 2012 to $.66 per share, for an annual rate of $2.64. At a December 24, 2012 closing price of $51.96, WPC’s yield is 5.1%. The company has a long history of a small dividend increase each quarter.  

The quarterly earnings call on November 8, 2012 was the first call after the merger and the conversion to a REIT.  CEO Trevor Bond said the pro forma results AFFO for the combined company for three quarters would have been $2.78 per share.  He said, “...our core business remains strong and growing, our dividend coverage is solid and the portfolio is in good shape as we enter into our first full quarter as a REIT.”  Bond pointed out that one result of the merger was a dramatic increase in the volume of daily trading.  Prior to the merger, the average daily volume was less than 50,000 shares.  In the first weeks after the merger, the daily volume was about 448,000 shares.

WPC has been the best performing stock in my retirement income portfolio. I first purchased shares in 2009 at $23.99 a share and I have steadily added to the holding.  I would consider adding more at $43.75 or less and I would consider selling some shares at $55.32 or more.  I believe it is worthy of study for possible inclusion in a dividend portfolio. This is not a recommendation to buy, but a suggestion for a stock to study. Do your own research.