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
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.