Easterly Government Properties (DEA), mcap=$2476m

DEA pitch:
– Cheap low-risk REIT that leases class A office properties to US govt agencies.
– The highest quality tenant in the world.
– Low renewal risk and vacancy of only 1.2%.
– 8% dividend is sustainable.
– Much higher return than treasuries, but with similar risk.
– Strong balance sheet with low-cost fixed-rate debt with no significant near-term maturities.
– Debt/EV at 46%.
– Solid management with longstanding relationships with various government agencies.

DEA valuation:
– Trades at 11.5x 2022 FFO and 12x E2023 FFO whilst offering a 8% TTM dividend yield.

Exp. gain: Not specified.

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