Agree Realty Nets a Single

Agree Realty's (NYSE: ADC  ) fourth-quarter results were respectable, about a 6.5 on a scale of one to 10. Better yet, the company is a rare REIT whose shares aren't trading at seemingly nosebleed valuations.

As mentioned in the Fool by Numbers, fourth-quarter sales were pretty much flat at $8.3 million, and funds from operations (FFO) increased 15% to $5.2 million. Most of the improvement was a result of reduction in general and administration costs.

For the year, sales were flattish at $32.9 million compared to $31.5 million, and FFO was also up a moderate 3.5%, to $19.9 million from $19.3 million. The FFO works out to $2.40 per diluted share for 2006; thus, at $34 each, the shares trade at 14 times trailing FFO. The $1.96 in annual dividends works out to a decent 5.7% dividend yield. The company ended the year with $130 million in book value, giving it a price-to-book multiple of 2.

Although growth has been hard for Agree to come by, it's hard to fault the company. At the end of the year, the company had 99.7% occupancy -- it's impossible to do much better than that. Also, 67% of base rent came from its top three tenants, Borders (NYSE: BGP  ) , Walgreen (NYSE: WAG  ) , and Kmart, a unit of Sears Holdings (NYSE: SHLD  ) . In terms of rent increases, Agree shareholders may have to wait another year. Only 0.7% of the company's leased square footage expires in 2007 - but in 2008, that figure is 9.4%.

All in all, Agree would be an agreeable investment to shareholders looking for strong credit and a decent dividend yield.

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Agree Realty is a Motley Fool Income Investor recommendation. Find more dividend superstars with a free 30-day trial of James Early's low-risk, high-reward newsletter service. Borders Group is a Motley Fool Inside Value pick.

Fool contributor Emil Lee is an analyst and a disciple of value investing. He doesn't own shares in any of the companies mentioned above. Emil appreciates your comments, concerns, and complaints. The Motley Fool has a disclosure policy.