From STAG to STAG’gering with “Divi-X”

Just to let you know up front; I have done absolutely no due diligence on this security whatsoever.  The reason I chose to write about this particular security is strictly because of its apparent popularity among commenters on the various financial sites that I frequent.  As is the case in all of the securities that I write about, this does not represent an endorsement of said security and as always do your own due diligence.   Now, with that out of the way, let’s get started.

 

Company Profile

STAG Industrial, Inc. is a real estate investment trust. The Company is focused on the acquisition, ownership, and operation of single-tenant, industrial properties across the United States. As of December 31, 2016, the Company owned 314 buildings in 37 states with approximately 60.9 million rentable square feet, consisting of 243 warehouse/distribution buildings, 54 light manufacturing buildings, 16 flex/office buildings, and one building in redevelopment. The Company owns all of its properties and conducts its business primarily through STAG Industrial Operating Partnership, L.P. (Operating Partnership). The Company invests in properties historically used for industrial, light manufacturing and commercial purposes. As of December 31, 2016, the Company's properties were in various locations, such as Montgomery, Alabama; Rogers, Arkansas; Phoenix, Arizona; Sparks, Maryland; Camarillo, California, and Golden and Grand Junction in Colorado (Source: Google Finance).

 

Leverage Projection

Normally, I do not write about a company unless it has at least five years of dividend paying history.  STAG Industrial, Inc. does meet that criteria but in fact, it has just over five years total of trading history under its belt.  Naturally, that is not an indicator of the quality of the company, but I know a lot of people are fans of companies that have an extensive history behind it and I just wanted to point that out.

STAG 050812 13.42 Yld 8.05 PE

STAG 050812 13.42 Yld 8.05 PE

 

Now, had we invested in STAG Industrial five years ago, this is what our ‘Leverage Projection Worksheet’ would have looked with a $10,000 investment on 05/04/12.  According to “Divi-X” suggested guidelines, we would have used a “Multiplier Pick” of only 65 because of STAG’s rather high dividend yield.  That being the case, it still afforded us a lofty 575.85 extra shares.

 

The Last Five Years

And my favorite part, the performance of STAG Industrial, Inc. over the last five years with and without using ‘The “Divi-X” System.’

 

STAG 050812 13.42 Yld 8.05 PE NA MP 65 RetPerc

STAG 050812 13.42 Yld 8.05 PE NA MP 65 RetPerc

 

As you can see, represented by the blue line, the share price alone actually did very well, pulling in a 95.08% total return over the last five years, or an annual average return of 19.02%.  Performing better still, represented by the purple line, is the cumulative effect of dividends added to the share price performance.  By that measure, STAG would have treated us to a very satisfying 143.06% total return after five years, or 28.61% annually on average.  The dividends alone added another 47.98% to a shareholders total return.

 

Now, the reason we’re all here.  How did we do if we had used “Divi-X” when we purchased STAG five years ago?  Well folks, I’m glad you asked.  Represented by the green line, you can see that “Divi-X” blew this thing out of the water with an eye-popping 230.92%, or an annual average return of 46.18%!  That’s a mind-numbing, 87.86% better than without using “Divi-X” on total, and a full 17.57% annual outperformance!

 

Let’s see how that translates into dollars on our $10.000 investment.

“Divi-X” easily outperformed throughout the five year entirety, and after five short years, it’s beautiful to see by how much.  Who couldn’t use an extra $8,785.89 ($33,092.01 - $24,306.22) in their pocket?  And believe it or not, this extra windfall is all because of one simple decision when we hit the ‘BUY’ order.

 

Dividends

Here’s the part where we look at how our dividend picture is.  ‘The “Divi-X” System Workbook’ gives you a guesstimation of what your dividend picture could look like over time (twenty years to be exact).

STAG 050812 13.42 Yld 8.05 PE NA MP 65 20YR

STAG 050812 13.42 Yld 8.05 PE NA MP 65 20YR

The purple bar represents the actual dividend ‘Yield on Cost’ for someone who didn’t use the “Divi-X” system.  That bar only increases when the company raises their dividend payout.  You can see after five years, it stops at 10.43%.  The blue bar represents projected dividend ‘Yield on Cost’ over the twenty year period.  This will always be wrong because companies do not have a consistent rate of increase in their dividends.  STAG is a good example of what I’m talking about, as you’ll see in the next chart.  But it does give you an idea of what that would look like if they did.

 

And finally, the green bar, which represents the ‘Yield on Cost’ for “Divi-X.”  Notice how close it matches the blue bar (Projected ‘Yield on Cost’) for the first five years.  Also notice how much higher it is than the purple bar (Without “Divi-X”).  The reason for this is because “Divi-X” receives a much larger dividend payout on a smaller total cash investment and the initial dividend yield was pretty high (8.05%) to begin with.

 

Dividend Growth Rate

I just added this new feature to ‘The “Divi-X” System Workbook.’  Its purpose is to show you how much faster the “Divi-X” dividend yield grows compared to someone who did not use “Divi-X.”

STAG 050812 13.42 Yld 8.05 PE NA MP 65 DGR

STAG 050812 13.42 Yld 8.05 PE NA MP 65 DGR

In addition, which I feel is a very subtle but very useful feature, are the linear trend lines.  These indicate the long-term trend of the company’s dividend rate increases.  As you can see in the example of STAG Industrial, both trend lines are going down.  This means that the annual rate of dividend increases by the company is slowing down.

 

The Next Five Years

This is the part where I post new info on a new purchase that I would normally track for the next five years, but because I didn’t do any due diligence on this particular security, I’m only going to post it to give you an idea of what a new purchase would look like in ‘The “Divi-X” System Workbook.’

 

Leverage Projection Worksheet

STAG 050817 25.99 Yld 5.39 PE 17.12 MP 80 LevProj

STAG 050817 25.99 Yld 5.39 PE 17.12 MP 80 LevProj

Return Scenarios

STAG 050817 25.99 Yld 5.39 PE 17.12 MP 80 RetScen

STAG 050817 25.99 Yld 5.39 PE 17.12 MP 80 RetScen

Dividend Outlook

STAG 050817 25.99 Yld 5.39 PE 17.12 MP 80 20YR

STAG 050817 25.99 Yld 5.39 PE 17.12 MP 80 20YR

 


Authored by Lee Carroll Wentker

All screen captures are taken from 'The "Divi-X" System Workbook'

If you haven't upgraded to 'The "Divi-X" System Workbook' yet, now's your chance, your promo code is still good.
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The security showcased here is for learning purposes only. It is not a recommendation or an endorsement of any kind. Do your own due diligence before making any investment.

All work is copyrighted by The Dividend Times, LLC 2015 - 2017

 

 

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