The average target price of GTY is 34 and suggests 21% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 34.0. This translates into 23% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 29.0. This suggests 5% upside potential. Even the most pessimistic analyst believes there will be stock growth. 

Getty Realty Corp. is the leading publicly traded real estate investment trust in the United States specializing in the ownership, leasing and financing of convenience store and gasoline station properties. As of September 30, 2020, the Company owned 896 properties and leased 58 properties from third-party landlords in 35 states across the United States and Washington, D.C.

Getty Realty Corp.

Real Estate

The company has a track record of regular dividend payments. It has paid dividends in each of the past ten years. Dividend per share (DPS) has grown yearly, and there is a clear trend. In the past 12 months, the dividend yield has been strong and significantly above its peers. At the same time, the average five-year yield has been significantly higher and exceeded nearly all its peers. On average, the company pays dividends quarterly, which may appeal to investors valuing a regular income stream. 

GTY reported revenue of USD 207mn in the last 12 months, up 2% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 4% from FY24 to USD 1.24. Market expects EPS to reach USD 1.22 in FY25.

Over the past six months, the stock has consistently fallen, resulting in a 6% total decrease. When measured against its worldwide peers from the same industry (as shown above), the stock has been weaker, underperforming by 8ppts. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported very strong EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 82.4% in the last 12 months, up from 73.3% in FY23. 

Historically, GTY has reported very strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 33.4%, a growth from 32.4% in FY23. 

Getty Realty Corp. reported a return on equity (RoE) of 7.2% in the last 12 months, up from 7.0% in FY23. The market consensus projects an RoE of 6.5% in FY24, again behind its peers. 

Another important profitability metric, return on assets (RoA), amounted to 3.6% in the last 12 months, an increase from 3.6% in FY23. The market analysts predict that RoA will be 3.4% in FY24, though below its peers in this period. 

In the last 12 months, the return on capital employed (RoCE) grew to 4.0%, above the peers. The consensus estimate for FY24 for RoCE is 5.4%, again ahead of the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 0.8 in the past several years. This ratio implies a poor shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

GTY boasts high trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is usually very stable and remains favourable on the days with the lowest activity. However, please consider that under highly turbulent market conditions, the trading volume tends to decrease significantly. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors and we point to excessive margin volatility, weak debt servicing capacity. We note robust profitability, among the positive credit factors. 

In highly turbulent market conditions, GTY is not overly volatile. In other words, the stock will fall less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be low. 

In normal market circumstances, GTY is not volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will stay within a narrow range. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to negligible. 

From both historical and forecast perspectives, the stock is fairly priced compared to similar stocks. Specifically, the stock is fairly valued on P/E, neutral on EV/EBITDA, reasonably priced on P/FCF. 

Getty Realty Corp.

$ 27.65

5

Getty Realty Corp.

$ 27.65

5

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

$ 27.65

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