Shares of Agree Realty (ADC +0.72%) jumped 11.4% in July, according to data provided by S&P Global Market Intelligence. The real estate investment trust (REIT) benefited from an improved growth forecast and credit rating upgrade last month.
Growing faster
Agree Realty reported solid second-quarter results last month. The retail REIT posted a 6.4% rise in its adjusted funds from operations (FFO) per share in the period. The company has benefited from rising rental income and its steadily expanding portfolio. It invested $203 million into 70 retail net lease properties in the second quarter, bringing its first-half total to $343 million across 102 properties.
ADC Agree Realty
NYSE · As of 4:00 PM ET 10/16/26
Even with all those acquisitions, the REIT ended the second quarter with strong liquidity. It took advantage of its rising stock price to sell 3.2 million shares, raising $194 million. In addition, its banks expanded its credit facility to $1.25 billion and extended its maturity until 2029. These factors enabled it to raise $650 million of capital, boosting its total liquidity to $1.7 billion.
Agree Realty ended the second quarter with a low leverage ratio of 4.1 times. That low level led credit rating agency S&P Global to upgrade the REIT's bond rating to BBB+ from BBB last month. That higher investment-grade rating will make it even easier for the REIT to access lower-cost capital in the future.
Agree Realty's strong liquidity and balance sheet gave it the confidence to increase its acquisition guidance for this year. It now expects to spend $700 million on new property purchases, a $100 million increase from its previous guidance. That also enabled the REIT to boost its full-year FFO forecast. "Given accelerating investment activity and the strong performance of our portfolio year-to-date, we are raising our 2024 AFFO per share guidance to a range of $4.11 to $4.14, reflecting 4.4% growth at the midpoint," stated CEO Joey Agree in the second-quarter earnings report.
Is Agree Realty a buy after last month's rally?
After rallying last month, Agree Realty's dividend yield has fallen to 4.2%. That's still well above the S&P 500's average of around 1.4%. Meanwhile, with its share price up to around $71.50 apiece, it trades at about 17 times its 2024 FFO forecast, a reasonable valuation for a REIT. Because of that, it's still an attractive buy for those seeking income. With a strong balance sheet and expanding portfolio, Agree Realty should be able to grow its high-yielding payout in the future.
