Updated 3/10/25
Getty Realty Corp. (GTY) isn’t the flashiest stock on the market, but for income investors, it has one standout feature—consistent dividends. As a real estate investment trust (REIT), Getty specializes in owning and leasing properties tied to gas stations, convenience stores, and other automotive-related businesses. These are essential services, which means a steady demand for its properties.
With a portfolio built on long-term leases, Getty generates reliable cash flow, which fuels its ability to pay dividends. But is it a solid choice for long-term investors seeking stable income? Let’s dig into the details.
Key Dividend Metrics
💰 Dividend Yield: 6.00% (Forward)
📈 5-Year Average Dividend Yield: 5.51%
📅 Next Dividend Payment: April 10, 2025
⚠️ Payout Ratio: 145.60% (Potential Concern)
📊 Dividend Growth: Steady but moderate
📆 Ex-Dividend Date: March 27, 2025
Dividend Overview
One of the first things that stands out about Getty Realty is its 6.00% forward dividend yield. That’s a big draw for income investors looking to maximize their returns. Historically, the yield has hovered around 5.51% on average over the last five years, meaning the stock has consistently provided strong income potential.
But there’s a red flag here—the payout ratio is sitting at a hefty 145.60%. This means Getty is paying out more in dividends than it’s generating in net income. That’s not an automatic dealbreaker, but it does raise some questions about long-term sustainability. In some cases, companies can maintain high payout ratios by using retained cash flow or leveraging debt, but that’s something to watch closely.
For now, Getty continues to make its dividend payments on schedule, with the next one set for April 10, 2025.
Dividend Growth and Safety
Getty’s dividend history leans more on the side of consistency rather than rapid growth. The company has made efforts to raise its dividend over time, but it’s not a high-growth payer. Instead, it focuses on keeping payouts steady, making it an appealing choice for those who prioritize income stability over aggressive growth.
The big concern here is sustainability. With a payout ratio over 100%, the dividend isn’t being fully covered by earnings. The good news is that free cash flow (FCF) and operating cash flow appear strong. Getty’s levered free cash flow stands at $199.71 million, while operating cash flow is at $130.5 million. As long as those numbers hold up, the company should be able to maintain its dividend, but if cash flow slows down, the risk increases.
Chart Analysis
Price Action and Moving Averages
Getty Realty’s stock has been in a consolidation phase over the past few months after reaching highs above $32.50. The price is currently trading near $31.34, sitting just above the 50-day moving average while remaining relatively close to the 200-day moving average.
This setup suggests the stock is at a key inflection point. The 50-day moving average has recently crossed below the 200-day moving average, a technical event known as a death cross. While this often signals downside momentum, the price has since rebounded and is now testing the 50-day line as support.
A sustained move above the 50-day moving average would indicate buyers stepping in, potentially pushing the price toward previous resistance levels near $32.50. However, if the price struggles to hold above this short-term moving average, it could lead to further consolidation or even downside pressure.
Volume and Market Participation
The volume in recent sessions has been relatively low, suggesting that neither buyers nor sellers are dominating the action. The only major volume spikes occurred around August when the stock saw a sharp upward move. Since then, volume has tapered off, with no major accumulation or distribution phases standing out.
For a stronger move in either direction, volume would need to pick up significantly. If the stock starts climbing with increasing volume, it could indicate renewed interest from institutional investors. On the other hand, if a breakdown occurs on heavy volume, it would suggest that sellers are regaining control.
Relative Strength Index (RSI) and Momentum
The RSI indicator, which measures momentum, is sitting in a neutral zone—not oversold, but also not in overbought territory. This confirms that the stock isn’t experiencing extreme selling pressure but also hasn’t built up enough bullish momentum to break out convincingly.
If the RSI pushes above 70, it would suggest the stock is entering overbought conditions, potentially signaling a short-term pullback. On the flip side, a drop below 30 would indicate oversold conditions, which could bring in buyers looking for value.
Recent Candle Formations
The last five candlesticks show mixed sentiment, with no clear trend developing. There have been some long wicks on both the top and bottom, suggesting indecision among traders. These types of candles often indicate a battle between buyers and sellers, making it important to watch for a decisive move in the coming days.
A strong bullish candle closing above recent highs could confirm an uptrend, while a close below $30.90 would indicate sellers taking control.
Analyst Ratings
Getty Realty Corp. (GTY) has recently experienced a mix of analyst upgrades and downgrades, reflecting different perspectives on the company’s performance and future outlook.
Upgrades:
- October 21, 2024: 🟢 BofA Securities upgraded Getty Realty from “Neutral” to “Buy,” raising the price target from $31 to $34. This decision was driven by strong financial performance and the company’s strategic positioning in the real estate market.
- December 17, 2024: 🟢 KeyBanc Capital Markets lifted Getty Realty to “Overweight” from “Sector Weight,” with a new price target of $35. Analysts pointed to steady earnings growth and solid management of its property portfolio as reasons for the upgrade.
Downgrades:
- January 6, 2025: 🔴 Baird downgraded Getty Realty from “Outperform” to “Neutral,” keeping the price target at $34. Concerns over potential headwinds in the retail real estate sector influenced this decision, with analysts cautious about future revenue growth.
- February 1, 2025: 🔴 BTIG lowered its rating from “Buy” to “Neutral,” without setting a new price target. This downgrade reflected a more conservative stance on the REIT sector amid economic uncertainty and interest rate fluctuations.
Consensus Price Target:
📊 The latest analyst projections place Getty Realty’s consensus price target at $33.67, suggesting a potential upside of 7.81% from its recent trading levels. This reflects a mixed outlook, balancing the company’s financial strengths with the challenges it may face in a shifting market.
Analysts remain divided on the stock, emphasizing the importance of monitoring broader industry trends and the company’s ability to navigate market conditions.
Earnings Report Summary
Getty Realty Corp. wrapped up the year on a strong note, with its latest earnings report showing steady growth and solid financial performance. The company, which focuses on convenience and automotive retail properties, continued expanding its portfolio while keeping its balance sheet in check.
Fourth Quarter Highlights
The final quarter of 2024 brought in better-than-expected results. Getty reported net earnings of 0.60 per share, easily surpassing analysts’ predictions. Investors often look at funds from operations (FFO) when evaluating REITs, and Getty delivered 2.21 per share in FFO, showing the company’s ability to generate strong cash flow. A more refined metric, adjusted funds from operations (AFFO), came in even higher at 2.34 per share, factoring in expenses like maintenance and capital improvements.
Full-Year Performance
Looking at the bigger picture, Getty ended 2024 with net earnings of 1.25 per share and maintained steady growth in both FFO (2.21 per share) and AFFO (2.34 per share). These numbers reinforce the company’s position as a reliable income-generating REIT with stable cash flow.
Expanding the Portfolio
Getty stayed active on the investment front, spending around 209 million to acquire 78 new properties. These acquisitions are expected to generate an initial cash return of 8.3 percent, a solid return for a growing portfolio.
By the end of the year, the company owned 1,118 properties, most of which are leased under triple-net agreements. This setup benefits Getty because tenants cover most property-related expenses, ensuring steady rental income with fewer operational headaches.
Strengthening the Balance Sheet
To support growth, Getty took strategic steps to raise capital. The company brought in 164.8 million by selling 5.4 million shares, along with securing 125 million in private debt financing. This move helps keep financial flexibility intact while funding future acquisitions and developments.
Revenue Growth and Future Plans
Getty’s rental income climbed to 198.7 million, up from 180.5 million the previous year. This boost came from new properties and successful redevelopment projects.
Looking ahead, the company plans to keep expanding its footprint by acquiring high-quality properties in prime locations. Management remains focused on building a portfolio that meets the growing demand for convenience-based retail and automotive services, setting the stage for long-term stability and cash flow growth.
With a solid financial foundation and a clear expansion strategy, Getty Realty continues to position itself as a strong player in the real estate investment space.
Financial Health and Stability
Real estate investment trusts, by nature, tend to carry a fair amount of debt. Getty is no exception.
- Total Debt: $918.9 million
- Debt-to-Equity Ratio: 95.51%
- Total Cash on Hand: $9.48 million
A debt-to-equity ratio close to 100% means Getty has almost as much debt as equity. While this isn’t unusual for REITs—since they operate with a heavy focus on property ownership—it does limit flexibility. The company’s cash position is also on the lower side, with just $9.48 million in reserves.
On the positive side, Getty remains profitable:
- Profit Margin: 34.94%
- Operating Margin: 54.69%
- Return on Equity (ROE): 7.41%
These numbers indicate that despite its debt, Getty is running a solid operation with healthy margins. That’s key because a strong profit margin helps offset financial risk, ensuring the company can continue to generate steady income.
Valuation and Stock Performance
In terms of valuation, Getty Realty isn’t particularly cheap, but it’s not overpriced either.
- Trailing Price-to-Earnings (P/E) Ratio: 25.07
- Price-to-Book Ratio: 1.79
A P/E ratio above 25 suggests the stock is trading at a premium relative to earnings, but that’s common for REITs, especially those with stable income streams. The price-to-book ratio is reasonable for a real estate-focused company, meaning investors aren’t paying an excessive premium relative to Getty’s asset value.
Stock price trends over the past year show some movement but no extreme swings:
- 52-Week High: $33.85
- 52-Week Low: $25.70
- Current Price: $31.54
With shares trading near the middle of their range, there’s room for upside, but the stock will likely be influenced by external factors such as interest rates. Higher rates tend to put pressure on REITs, as they raise borrowing costs and make fixed-income investments more attractive compared to dividend-paying stocks.
Risks and Considerations
No stock is without risks, and Getty Realty has a few worth keeping an eye on:
- High Payout Ratio – With dividends exceeding net income, future payouts could be at risk if cash flow weakens.
- Debt Load – A debt-to-equity ratio near 100% means the company has limited financial flexibility. Rising interest rates could also increase borrowing costs.
- Interest Rate Sensitivity – As a REIT, Getty is directly impacted by interest rate changes. Higher rates could weigh on stock performance.
- Tenant Risk – The company’s portfolio consists of gas stations and convenience stores. If major tenants struggle, rental income could take a hit.
- Slow Dividend Growth – While reliable, Getty’s dividend growth isn’t particularly aggressive. Investors looking for fast-growing income streams may find other options more attractive.
Final Thoughts
Getty Realty is a steady income play with a high dividend yield, making it appealing to dividend-focused investors. Its portfolio of essential-service properties ensures stable demand, and its long-term leases provide reliable cash flow.
However, there are some concerns, particularly the high payout ratio and debt levels. These factors don’t make Getty an outright risk, but they do mean investors should keep a close watch on cash flow trends and interest rate movements.
For those who value income stability over high growth, Getty Realty remains an interesting dividend stock to consider. But given the financial metrics, it’s a stock that requires ongoing monitoring to ensure that its strong yield remains sustainable in the long run.
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