Spirit Realty Capital REIT Up To New 6-Month High

Spirit Realty Capital Inc. SRC is trending upward so strongly that it hit a new six-month high earlier this week. 

The Dallas-based real estate investment trust (REIT) operates a portfolio of more than 2,100 properties with 55 million square feet in 49 states.

Funds from operations (FFO) increased by 805% in 2022, and its FFO over the past five years shows a gain of 35%. Nonetheless, in January 2023, analysts at Raymond James downgraded Spirit Realty from Outperform to Market Perform, perhaps recognizing that the 2022 results might be a one-of-a-kind outlier.

The New York Stock Exchange-listed REIT is traded with an average daily volume of 730,000 shares. The price-earnings ratio sits at 23 and trades at 1.36 times book value. Spirit Realty is paying a 6.05% dividend.

In this real estate sector, while paying that kind of solid dividend, the company may be vulnerable to the possibility of interest rate hikes. With inflation readings for January to be released on Feb. 14 in the consumer price index report, investors who hold this REIT will be watching closely.

Here’s the daily price chart:

After bottoming in October at $34, the REIT is headed steadily upward, with a high of $43 as of this writing. That’s a 26% increase in value in not quite four months — a good performance by most Wall Street analyst standards. The company’s ability to sustain it is another matter. 

From a chart analysis standpoint, it looks good that the 50-day moving average (the blue line) has crossed above the 200-day moving average (the red line). That Spirit Realty’s price is trending upward above both of the moving averages is also positive.

The weekly chart looks like this:

You can see how well the REIT has recovered from the lows seen during the March 2020 pandemic scare. But it might be concerning that it seems to have peaked near the $48 mark by mid-2021. With Spirit Realty now trending higher, above both the significant weekly moving averages, those concerns may soon be alleviated — although no guarantees can be made.

Not investment advice. For educational purposes only.

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