3/8/25
First Industrial Realty Trust (FR) is a real estate investment trust (REIT) that focuses on industrial properties in key U.S. markets. Its portfolio includes warehouses and distribution centers, which have been in high demand thanks to the continued expansion of e-commerce and logistics infrastructure.
The stock is currently trading around $57.50, which puts it near its 52-week high. While it dipped slightly in regular trading, it bounced back in after-hours movement. For income-focused investors, FR offers a compelling mix of steady dividend payments and exposure to a sector that remains crucial to modern supply chains.
With real estate investments, especially in the industrial sector, there are always a few factors to watch. Rising interest rates, economic slowdowns, and property valuations all play a role in determining future returns. But for now, FR remains an attractive option for those who prioritize income without taking on excessive risk.
Key Dividend Metrics
📈 Dividend Yield: 3.10% (Forward)
💰 Annual Dividend Payout: $1.78 per share
📊 Payout Ratio: 68.20% – Sustainable for a REIT
📆 Next Dividend Date: April 21, 2025
⚠️ Ex-Dividend Date: March 31, 2025
📈 5-Year Average Dividend Yield: 2.35% – Currently above historical levels
🔄 Dividend Growth: Modest but consistent
Dividend Overview
FR’s forward dividend yield of 3.10% stands out, especially considering its 5-year average of 2.35%. This suggests the stock might be slightly undervalued in terms of its income potential.
The company’s payout ratio of 68.2% is well within a safe range for a REIT. By law, REITs must distribute at least 90% of taxable income to shareholders, so this level is expected. At the same time, it leaves some breathing room for reinvestment and future growth.
Compared to other industrial REITs, FR’s dividend policy is on the stable side. It’s not the highest-yielding option in the sector, but it has a solid track record of delivering reliable income.
Dividend Growth and Safety
FR has a history of moderate dividend increases, though it hasn’t been an aggressive grower. Its business benefits from the increasing demand for logistics and industrial properties, but management has opted for a steady, measured approach to dividend hikes.
Several factors contribute to its dividend safety:
✅ Strong cash flow generation – Operating cash flow stands at $352.49 million, and levered free cash flow comes in at $294.38 million. This means there’s ample cushion to support the dividend.
✅ Solid profitability – A profit margin of 42.78% and an operating margin of 41.67% indicate that the company runs efficiently.
✅ Reasonable debt levels – A debt-to-equity ratio of 81.1% is not excessive for a REIT, but it’s worth keeping an eye on, especially in a rising rate environment.
One potential concern is the recent earnings decline of 23.3% year-over-year. If this trend continues, it could impact dividend growth potential. However, revenue is still on the rise, up 10.5% over the same period, which helps balance the equation.
Chart Analysis
Price Action and Trend
The stock has been on an upward trajectory since bottoming out in late 2024. A strong rally in early 2025 pushed the price above both the 50-day and 200-day moving averages, signaling a shift in momentum. Currently, the stock is trading around $57.50, near its recent highs.
The 50-day moving average has turned sharply upward and is now above the 200-day moving average, forming a bullish crossover. This kind of setup often signals a longer-term uptrend, suggesting buyers have taken control. However, the stock is nearing a key resistance level, as seen from the previous peaks.
Volume and Market Participation
Trading volume has seen spikes at key turning points, with a noticeable increase in February as the stock started to climb. This suggests that institutional or large investors may have been accumulating shares. More recently, volume has tapered off slightly, indicating that the strong momentum may be cooling.
If the stock breaks above its recent highs with increased volume, it could confirm another leg higher. On the other hand, if volume continues to decline, it may indicate that buying interest is fading, which could lead to a pullback.
Relative Strength Index (RSI)
The RSI is hovering around 47, sitting in a neutral zone. This means the stock isn’t overbought or oversold, leaving room for movement in either direction. If the RSI starts climbing toward 70, it could indicate that the stock is becoming overbought, which sometimes leads to short-term pullbacks. Conversely, if it dips toward 30, it could signal that the stock is losing strength.
Moving Averages and Support Levels
The 50-day moving average has acted as dynamic support during this rally. A pullback to this level, currently around $53.44, would be a healthy retracement as long as it holds. Below that, the 200-day moving average near $52.66 would be another key level to watch.
A break below these moving averages could shift momentum to the downside, while a push above the recent highs would reinforce the bullish trend.
Analyst Ratings
In recent months, First Industrial Realty Trust (FR) has experienced a mix of analyst evaluations, reflecting both positive and cautious sentiments.
Upgrades 📈
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Goldman Sachs: On February 21, 2025, Goldman Sachs upgraded FR from a “sell” to a “neutral” rating and raised the price target from $52 to $59. This change was driven by FR’s strong financial performance and strategic positioning in the industrial real estate sector, which has benefited from the growth of e-commerce and logistics.
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KeyCorp: On December 17, 2024, KeyCorp shifted its rating from “underweight” to “sector weight,” influenced by FR’s consistent occupancy rates and its ability to secure long-term leases with creditworthy tenants, ensuring stable revenue streams.
Downgrades 📉
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Wedbush: On April 25, 2024, Wedbush downgraded FR from “outperform” to “neutral,” adjusting the price target from $59 to $49. This decision stemmed from concerns about potential oversupply in certain industrial real estate markets, which could pressure rental rates and occupancy levels.
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Barclays: On November 18, 2024, Barclays downgraded FR from “overweight” to “equal weight,” setting the price target at $55. The downgrade was based on apprehensions regarding rising interest rates, which could increase borrowing costs for REITs like FR and potentially impact profitability.
Consensus Price Target 🎯
As of the latest analyses, FR holds a consensus price target of approximately $58.31, suggesting a modest upside from its current trading levels. This consensus reflects a balanced view among analysts, acknowledging both the company’s strengths in the industrial real estate sector and the external challenges it may face.
These varied analyst opinions underscore the dynamic nature of the real estate market and highlight the importance of considering multiple factors when evaluating investment opportunities in this sector.
Earning Report Summary
First Industrial Realty Trust (FR) wrapped up 2024 with a solid performance, showing strength in key areas but also facing some expected challenges. The company reported net income of $0.52 per share for the fourth quarter, which was a bit lower than the $0.67 per share it posted in the same period the year before. However, funds from operations (FFO), a key measure for REITs, climbed to $0.71 per share, up from $0.63 a year earlier, bringing full-year FFO to $2.65. That’s an 8.6% increase, signaling steady growth in its core operations.
One of the big wins for FR in 2024 was its leasing activity. The company signed deals for about 4.7 million square feet of development space, which was well above its original target of 2.8 million square feet. Thanks to strong demand, occupancy rates improved to 96.2% by the end of the year, up from both the previous quarter and the year before.
Revenue for the year came in at $669.6 million, a noticeable jump from $614.0 million in 2023. A big part of that was driven by higher rental rates and tenant recoveries. Net income also got a boost, reaching $296.0 million, up from $285.8 million the previous year. The company also made moves with its portfolio, purchasing five new industrial properties and securing 81 acres of land for around $70.7 million. On the flip side, it sold 22 properties, bringing in $162.8 million, a strategic move to focus on high-demand logistics markets.
In a big win for dividend investors, FR announced a dividend increase of 20.3%, raising its quarterly payout to $0.445 per share. With cash flow looking strong, this increase reinforces the company’s commitment to rewarding shareholders.
Looking ahead to 2025, FR expects FFO to grow by another 10%, forecasting between $2.87 and $2.97 per share. The company anticipates keeping occupancy levels between 95% and 96%, and while it plans to sell some properties, it expects those sales to bring in around $75 million, which is less than last year’s $163 million.
Overall, the numbers show a company that’s in a strong position, benefiting from high demand for industrial real estate while making strategic moves to keep growing.
Financial Health and Stability
FR’s balance sheet is in good shape, though it does carry some leverage, as most REITs do. The company has $44.51 million in cash, while total debt sits at $2.23 billion. The debt-to-equity ratio of 81.1% is within industry norms, but higher interest rates could put pressure on financing costs.
A current ratio of 1.40 suggests that liquidity isn’t an issue, and with a return on equity of 11%, FR is effectively utilizing shareholders’ capital.
With a beta of 1.09, the stock is slightly more volatile than the broader market. That means investors can expect some fluctuations, but nothing extreme.
Valuation and Stock Performance
FR is currently trading at a price-to-book (P/B) ratio of 2.86, meaning it’s priced above its net asset value. This suggests the market sees room for growth.
The price-to-sales ratio of 11.37 and enterprise value-to-EBITDA of 17.58 show that FR isn’t trading at a discount, but it’s also not overvalued relative to its industry peers.
Looking at the stock’s performance, it has moved within a 52-week range of $45.10 to $58.17. Right now, it’s sitting near the top end of that range, which might indicate limited short-term upside. However, the stock is trading above both its 50-day moving average ($53.44) and its 200-day moving average ($52.66), which signals positive momentum.
Risks and Considerations
Even though FR has strong fundamentals, there are some risks to keep in mind:
🚧 Interest rate exposure – As a REIT, FR relies on borrowing, so higher interest rates can impact both financing costs and overall valuation.
🚧 Earnings contraction – The 23.3% drop in quarterly earnings is worth watching. If earnings keep declining, it could affect dividend growth.
🚧 Debt management – A debt-to-equity ratio of 81.1% isn’t alarming, but it does mean the company has a level of leverage that requires close monitoring.
🚧 Stock price near highs – With shares close to their 52-week peak, there may not be much room for immediate gains unless earnings improve.
Final Thoughts
First Industrial Realty Trust is a dependable dividend payer in the industrial REIT space. With a 3.10% yield, it offers a higher-than-average income stream while maintaining a reasonable payout ratio of 68.2%.
The company has a strong financial foundation, though its recent earnings dip is something to keep an eye on. Debt levels are typical for a REIT, but rising interest rates could make future financing more expensive.
For those looking for steady REIT exposure with a reliable dividend, FR checks a lot of the right boxes. While it may not offer explosive dividend growth, it provides a solid combination of income and stability in a sector that remains essential to the economy.
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