STAG’s Unique Investment Strategy
Stag focuses on the acquisition and operation of single-tenant industrial properties across the United States. As the following table shows, the company is diversified across geographies, tenants and industries.
Stag is unique in the sense that it invests in properties perceived to be higher risk, but then reduces the risk through diversification. Specifically, Stag invests in single-tenant, industrial properties, located in non-primary (i.e. secondary and tertiary) locations, posing unique binary cash flow risks. However, as the following graphic shows, Stag believes it can diversify away a significant portion of the risk so as to reduce volatility and keep returns high.
We agree Stag can (and does) diversify away SOME of the risk (more on risk later), and we believe there is significant opportunity for Stag to continue to grow its funds from operations, dividend and share price.
This next chart shows the trajectory of Stag’s growth in FFO (it’s impressive, in our view).
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