Updated 3/5/25
Alpine Income Property Trust, Inc. (NYSE: PINE) is a relatively small but intriguing player in the real estate investment trust (REIT) sector. The company focuses on single-tenant net lease properties, meaning it owns commercial real estate that is leased out to well-known tenants, often on long-term agreements. These types of properties can offer stable cash flow, making them attractive for income investors.
While Alpine may not be the biggest name in the REIT space, it has built a portfolio of over 150 properties across various states, leasing to major retail and office tenants. For dividend investors, the 6.93% yield is a definite eye-catcher. However, with a payout ratio nearing 793%, questions arise about whether the dividend can be sustained.
To get a full picture, let’s break down Alpine’s dividend, financial health, valuation, and risks to see if this stock deserves a place in a long-term income portfolio.
Key Dividend Metrics
💰 Dividend Yield: 6.93% (Forward)
📈 5-Year Average Dividend Yield: 5.56%
💵 Annual Dividend Rate: $1.14
🔄 Payout Ratio: 792.86%
📅 Next Dividend Payment: March 31, 2025
⏳ Ex-Dividend Date: March 13, 2025
Dividend Overview
Alpine Income Property Trust offers a high dividend yield that stands well above the average REIT. At 6.93%, it’s a tempting option for income investors, especially those looking for alternatives to bonds or traditional dividend stocks.
Compared to its five-year average dividend yield of 5.56%, the current yield suggests the stock may be undervalued. However, it’s just as possible that investors are demanding a higher return because of the risks associated with its earnings and cash flow.
The biggest concern is the payout ratio, which is sitting at an eye-watering 792.86%. This number suggests the company is paying out far more than it earns, which is not a sustainable long-term practice. While REITs are required to distribute most of their taxable income as dividends, an excessively high payout ratio often means the company is using debt or asset sales to cover payments—both of which are not ideal strategies for dividend stability.
Dividend Growth and Safety
Alpine has maintained its dividend payments consistently, though it doesn’t have a long track record of growth. Since going public in 2019, the company has increased its dividend modestly, but its ability to continue doing so remains uncertain.
Dividend safety is a real concern here. The company’s return on assets (1.25%) and return on equity (0.82%) are both relatively low, which doesn’t inspire confidence that earnings growth will accelerate enough to support future increases. If earnings don’t improve or cash flow remains tight, Alpine may have to consider cutting its dividend in the future.
On the positive side, Alpine benefits from a strong tenant base, which should provide stable rent payments. This helps reduce the immediate risk of a dividend cut, but investors should still be cautious and keep an eye on earnings trends.
Chart Analysis
The chart for PINE presents an interesting picture of price action over the past year. After a period of sideways movement in the earlier months, there was a strong breakout in mid-year, leading to a substantial rally. The price climbed well above both the 50-day (orange line) and 200-day (blue line) moving averages, signaling strong bullish momentum at that time.
As the uptrend matured, signs of distribution began to emerge, with the stock losing momentum and struggling to make new highs. The decline in price saw the 50-day moving average roll over and begin sloping downward, eventually crossing below the 200-day moving average. This type of crossover, often referred to as a “death cross,” is typically a bearish signal that suggests a shift in trend.
Volume patterns throughout the chart reveal periods of strong buying interest followed by higher selling volume towards the latter part of the timeframe. The spikes in red volume bars suggest distribution phases where institutional investors may have been offloading shares.
Looking at the RSI indicator at the bottom, there was a period of overbought conditions around the peak of the price rally, which was followed by a gradual cooling-off period. The RSI has since settled in a neutral range, indicating the stock is not currently in overbought or oversold territory.
In more recent price action, the stock is trading close to the 200-day moving average after breaking below the 50-day moving average. This suggests that it is at a key technical level where traders may be watching for a potential support hold or further downside if selling pressure resumes.
Analyst Ratings
📊 Alpine Income Property Trust (PINE) has recently received a mix of upgrades and downgrades from analysts, reflecting both optimism and caution. The consensus price target sits at $19.25, suggesting a potential upside of around 16.77% from the current share price. Analysts remain divided, with some seeing strong growth potential, while others point to risks that could limit future gains.
🔼 Upgrades and Positive Evaluations
- 🏆 Stifel Nicolaus raised its price target from $19.75 to $20.25, maintaining a Buy rating. This suggests confidence in PINE’s strategic execution and financial outlook.
- 📈 Robert W. Baird boosted its price target from $18.00 to $19.00, reiterating an Outperform rating. Analysts see potential for the stock to outpace market performance.
- 🔎 Alliance Global Partners slightly adjusted its price target from $21.00 to $20.00 but kept a Buy rating. While acknowledging minor hurdles, they remain optimistic about long-term growth.
🔽 Downgrades and Cautious Perspectives
- ⚠️ Truist Financial lowered its price target from $18.00 to $17.00, maintaining a Hold rating. The firm expressed caution, citing broader economic uncertainties and company-specific risks.
- 🤔 UBS adjusted its target from $19.00 to $18.00, keeping a Neutral stance. This reflects a balanced outlook, recognizing both strengths and challenges ahead for PINE.
These mixed ratings show that while Alpine Income Property Trust has potential, investors should weigh both the opportunities and risks before making any decisions.
Earnings Report Summary
Alpine Income Property Trust (PINE) wrapped up 2024 with a mix of growth, strategic moves, and a few challenges to keep an eye on. The latest earnings report showed steady progress in key areas, with the company expanding its portfolio, maintaining a strong occupancy rate, and continuing to reward shareholders with dividends.
Financial Performance
The company reported a slight net loss for the fourth quarter, but over the full year, there was a solid 17% increase in Adjusted Funds From Operations (AFFO), coming in at $0.74 per share. That’s a good sign for investors looking at the long-term health of the company. It shows that even with some short-term hurdles, PINE is finding ways to grow and generate income.
Dividend Growth
PINE isn’t just holding steady—it’s increasing payouts to shareholders. The latest dividend bump brings the quarterly payout to $0.285 per share, or $1.14 on an annualized basis. That marks four straight years of dividend growth since the company went public in 2019. For income-focused investors, this kind of consistency is a big plus.
Expanding the Portfolio
PINE has been busy on the investment front, adding new properties while also refining its portfolio through sales and loan originations.
- Acquisitions: The company purchased six new properties in the last quarter, spending $50.5 million at an average yield of 7.6%. Over the full year, it acquired a total of 12 properties for $134.7 million, averaging a higher yield of 8.2%.
- Commercial Loans: PINE also stepped into the lending space, originating $31.1 million in commercial loans, which are bringing in a strong 10.7% return.
- Property Sales: To fine-tune its portfolio, PINE sold properties worth $62 million, using the proceeds to reduce exposure to certain tenants and increase diversification.
Operational Strength
One of the biggest positives from the report is the company’s high occupancy rate, sitting at an impressive 99.4%. That means nearly all of its properties are generating rental income. Lease terms are also in great shape, averaging 7.8 years, which ensures stability for the long haul. Another strong point—around 68% of PINE’s rental income comes from tenants with investment-grade credit, making it less likely to deal with missed payments or financial struggles from renters.
Balance Sheet and Liquidity
Financial flexibility remains a key strength for PINE. The company ended the year with $95 million in available liquidity and access to a credit facility that could expand up to $150 million. That gives it plenty of room to make new investments, pay down debt, or handle any unexpected expenses.
Looking Ahead to 2025
The outlook for 2025 remains positive, with earnings guidance suggesting Funds From Operations (FFO) and AFFO will land between $1.70 and $1.73 per share. PINE expects to continue investing in new properties, with acquisition targets set between $50 million and $80 million. At the same time, it plans to sell off between $20 million and $30 million in assets to further refine its portfolio.
There are a couple of challenges to watch, including a tenant bankruptcy and a vacant property that could impact earnings by about $0.08 per share. While not ideal, these aren’t make-or-break issues, and PINE appears well-positioned to handle them.
Overall, the earnings report shows a company that’s growing, managing its portfolio strategically, and committed to delivering returns for shareholders. The combination of a high occupancy rate, solid dividend growth, and financial flexibility makes it an interesting name to watch for income investors.
Financial Health and Stability
One of the biggest issues with Alpine Income Property Trust is its level of debt. The company currently holds $304.7 million in total debt, resulting in a debt-to-equity ratio of 110.2%. While most REITs operate with a significant amount of leverage, this level is on the higher end, which adds financial risk.
A few positives include:
✔️ Current ratio of 14.67, meaning the company has enough liquidity to cover its short-term obligations.
✔️ Quarterly revenue growth of 19.1% year-over-year, which indicates the business is expanding.
However, there are also some concerns. The levered free cash flow is negative (-$22.44 million), meaning that the company is currently using more cash than it generates after debt obligations. This reinforces the idea that Alpine is relying on external financing to sustain operations and its dividend, a strategy that may not be viable in the long run.
Valuation and Stock Performance
From a valuation standpoint, Alpine appears to be trading at a discount relative to its assets. With a price-to-book ratio of 0.95, the stock is currently priced below the value of its real estate holdings. This could indicate an attractive entry point for investors looking for value plays in the REIT sector.
The stock has fluctuated between $14.32 and $19.42 over the past year, suggesting it has found some stability despite broader market volatility.
Looking at earnings valuation, however, the numbers are less favorable. Alpine’s forward P/E ratio is 65.36, which is quite high. This suggests that the stock isn’t cheap based on its earnings, and investors may be pricing in slow growth ahead.
On the technical side, the stock is currently trading below both its 50-day moving average ($16.59) and 200-day moving average ($16.99). This suggests that the stock has been under some selling pressure in recent months. If it can hold above the $16 support level, it may present a buying opportunity for those who believe in the long-term stability of its income potential.
Risks and Considerations
Every investment carries some risk, and Alpine Income Property Trust is no exception. Here are a few key factors that investors should consider before buying shares.
High Payout Ratio and Dividend Sustainability
A payout ratio that’s nearly eight times earnings is not something that can be ignored. Unless earnings and cash flow increase significantly, maintaining this level of dividend payments will be difficult.
Rising Interest Rates and Debt Costs
As a REIT, Alpine relies on debt to finance its property acquisitions. Rising interest rates make borrowing more expensive, which could pressure margins and limit future growth.
Tenant Concentration and Real Estate Market Risks
While Alpine leases to well-known companies, a downturn in the retail or office space markets could lead to higher vacancies. If tenants struggle financially, rental income could take a hit, impacting cash flow and, ultimately, dividends.
Short Operating History
Unlike larger, more established REITs, Alpine has only been around for a few years. Without a long track record of navigating different market cycles, it’s harder to predict how well the company will manage economic downturns.
Final Thoughts
Alpine Income Property Trust offers an attractive 6.93% dividend yield, but it comes with notable risks. The combination of a high payout ratio, significant debt, and limited earnings growth makes it a stock that requires careful monitoring.
For income investors, the yield is tempting, and the valuation could suggest an opportunity. However, there are real concerns about whether Alpine can sustain its dividend over the long term. If earnings and cash flow don’t improve, the company may have to adjust its payout strategy.
For those who are willing to take on some risk for a higher yield, Alpine may be worth a closer look. But for investors seeking a safe, long-term dividend play, it might be better to wait for clearer signs of financial stability before jumping in.
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