Is STAG a good stock to buy? We came across a bullish thesis on STAG Industrial, Inc. on DividendInvestor’s Substack. In this article, we will summarize the bulls’ thesis on STAG. STAG Industrial, Inc.’s share was trading at $39.48 as of April 27th. STAG’s trailing P/E was 27.04 according to Yahoo Finance.
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STAG Industrial, Inc. (STAG) is an industrial REIT positioned as a differentiated player through its focus on single-tenant properties in secondary U.S. markets, enabling durable organic growth and disciplined capital allocation. Despite broader investor skepticism toward rate-sensitive REITs, STAG has delivered its strongest Core FFO growth since 2014, with 2025 Core FFO per share rising 6.3% year-over-year to $2.55, alongside an 8.2% increase in Q4, supported by robust leasing economics and operational execution.
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The company’s model benefits from a significant rent mark-to-market opportunity, evidenced by blended cash rent increases of 24.0% and straight-line growth of 38.2% on 2025 leases, highlighting materially under-market in-place rents that provide a multi-year embedded growth runway. This momentum continues into 2026, with 69.2% of leasing activity already executed at a 20.0% cash rent increase, reinforcing visibility into sustained 6%+ FFO growth.
STAG complements this organic engine with accretive acquisitions at cap rates of 6.4% to 7.1% and contractual rent escalators averaging 3.5%, while maintaining a strong 77.2% retention rate that minimizes vacancy risk. Financially, the company exhibits a conservative 58.4% FFO payout ratio, generating $405.4 million in cash available for distribution, supporting dividend safety and growth, including its largest dividend increase since 2014.
With investment-grade credit, 5.2x net leverage, and 4.6x interest coverage, the balance sheet remains resilient. Trading at approximately 15.6x forward P/FFO, STAG offers an attractive valuation relative to its growth profile, positioning the stock for continued rerating as the market recognizes its durable cash flows and compounding total return potential.
Previously, we covered a bullish thesis on STAG Industrial, Inc. (STAG) by Steve Wagner in May 2025, which highlighted strong leasing spreads, disciplined capital recycling, and resilient portfolio fundamentals driving steady FFO growth. STAG’s stock price has appreciated by approximately 19.31% since our coverage. DividendInvestor shares a similar view but emphasizes on accelerating FFO growth and embedded rent mark-to-market opportunity.
STAG Industrial, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held STAG at the end of the fourth quarter which was 28 in the previous quarter. While we acknowledge the risk and potential of STAG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than STAG and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
