Getty Realty Corp . (NYSE:GTY) has entered into a significant underwriting agreement with a consortium of banks, including BofA Securities, J.P. Morgan, and Goldman Sachs (NYSE:GS), among others, the company disclosed in a recent SEC filing. The agreement, dated Monday, July 29, 2024, pertains to the sale of 3.5 million shares of common stock at a public offering price of $30.10 per share.
The transaction closed today, with the company concurrently entering into forward sale agreements with the underwriters' affiliates, who acted as forward purchasers. These agreements involve the forward sale of the same number of shares, with an initial forward sale price of $28.896 per share, subject to adjustments. Getty Realty will not receive immediate proceeds from the sale of shares by the forward sellers but expects to physically settle the forward sale agreements within approximately one year from the prospectus supplement date.
The physical settlement of the forward sale agreements will allow Getty Realty to issue and deliver shares of common stock in exchange for cash proceeds. While the company anticipates settling these agreements entirely through physical delivery, it retains the option for cash or net share settlements.
Proceeds from the settlement are earmarked for various corporate purposes, including property acquisitions, repaying debt under the company’s credit facility, and general corporate expenditures. Additionally, the underwriters have been granted a 30-day option to purchase up to an additional 525,000 shares of common stock, potentially leading to another forward sale agreement.
In other recent news, Getty Realty has shown considerable growth amid market uncertainties. The company's second quarter of 2024 saw a 15% increase in annualized base rent and adjusted funds from operations (AFFO) per share. Additionally, Getty Realty raised its full-year AFFO guidance, demonstrating its confidence in its investment strategy and portfolio management.
The company invested over $100 million in properties, adding three new national tenants, and maintains a high occupancy rate of 99.7%. Getty Realty also reported over $53 million in assets under contract, indicating continued growth. Despite acknowledging uncertainties in transaction and capital markets, the company remains confident in its business model.
Analysts from firms such as Brian Dickman and Mark Olear provided insights into Getty Realty's investment strategy, highlighting the company's focus on building relationships with car wash and quick service restaurant operators. These recent developments suggest that Getty Realty continues to adapt and grow, maintaining a strong and stable portfolio despite prevailing market uncertainties.
InvestingPro Insights
Getty Realty Corp. (NYSE:GTY) has demonstrated a strong financial performance, which is reflected in the real-time data from InvestingPro. With a market capitalization of $1.71 billion and a solid P/E ratio of 24.88, the company shows stability in its valuation metrics. The P/E ratio, slightly adjusted to 26.87 for the last twelve months as of Q2 2024, still indicates a reasonable valuation in comparison to earnings. Investors may be particularly interested in the company's revenue growth, which stands at 14.02% for the same period, underscoring its capacity for expansion and increased profitability.
Furthermore, InvestingPro Tips highlight that Getty Realty has not only maintained dividend payments for an impressive 30 consecutive years but has also raised its dividend for 7 consecutive years, showcasing its commitment to returning value to shareholders. The company's financial health is also evident through its liquidity position, with liquid assets surpassing short-term obligations. Additionally, analysts predict that Getty Realty will remain profitable this year, a sentiment supported by a robust gross profit margin of 88.85% for the last twelve months as of Q2 2024.
For those considering an investment in Getty Realty, it's notable that the company has had a strong return over the last month, with a 12.9% price total return, and a dividend yield of 5.98% as of the latest data. These insights, coupled with the company's strategic moves in the market, such as the underwriting agreement detailed in the article, may provide a compelling case for potential investors. For more in-depth analysis and additional InvestingPro Tips, readers can explore the full suite of insights available at InvestingPro.
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