Modiv Industrial boosts AFFO estimate after share buyback

NEW YORK - Modiv Industrial, Inc. (NYSE:MDV), a real estate investment trust (REIT) specializing in industrial manufacturing properties with a market capitalization of $171 million, announced a strategic financial maneuver involving the repurchase of its Series A Preferred shares. According to InvestingPro data, the company maintains impressive gross profit margins of 92% and a strong current ratio of 9.09, indicating robust financial health. The company has retired 7.5% of these shares at a 6% discount to par value, equating to a transaction of 150,000 shares at $23.50 per share, totaling $3.525 million.

This repurchase represents a 7.85% annual yield and a 13.45% yield to call for the company. As a result of this transaction, Modiv Industrial has raised its 2025 Adjusted Funds From Operations (AFFO) forecast to $1.39 per fully diluted share, marking a slight increase from previous estimates. InvestingPro analysis reveals that net income is expected to grow this year, with analysts maintaining a strong buy consensus. Get access to 8 more exclusive ProTips and comprehensive financial analysis with InvestingPro.

Aaron Halfacre, CEO of Modiv Industrial, commented on the significance of the transaction, highlighting the company’s disciplined approach and commitment to enhancing shareholder value. He pointed out that the buyback is more advantageous than purchasing a comparable $3.5 million property due to the higher annual yield and the potential for cost savings over time.

The transaction is expected to generate $276,000 in additional annual savings, adding to the recently announced $700,000 in interest savings and $300,000 in revolver savings related to the company’s leverage. Halfacre emphasized that such decisions demonstrate Modiv Industrial’s capacity to impact its financial performance positively, even as a small cap REIT.

The CEO also noted that the funds for the purchase were already available on the company’s balance sheet, implicitly linking the cash to equity issued in the fourth quarter of 2024 at a dividend yield/cost of capital of 7.24%. The capital from that issuance has now been redeployed at a 7.85% yield. The company currently offers shareholders a significant dividend yield of 7.3%, as reported by InvestingPro, which provides detailed analysis of over 1,400 US stocks through comprehensive Pro Research Reports.

Modiv Industrial focuses on acquiring single-tenant net-lease industrial manufacturing real estate, positioning itself as a key player in supporting the national economy and reinforcing supply chains. Trading at a P/E ratio of 59, the company has demonstrated strong financial performance with a Piotroski Score of 7, indicating solid operational efficiency.

The information provided is based on a press release statement by Modiv Industrial, Inc. and does not include any speculative or forward-looking statements beyond what has been officially announced by the company.

In other recent news, Modiv Industrial Inc. reported its fourth-quarter 2024 earnings, surpassing Wall Street expectations with an earnings per share (EPS) of $0.07, compared to the forecasted $0.03. The company’s revenue for the quarter reached $11.73 million, slightly above the projected $11.55 million. Modiv Industrial also announced an amendment to its sales agreement concerning its Class C common stock, allowing for the continued offering and sale of shares with an aggregate offering price of up to $50 million. The amendment aims to update the definition of "Agents" involved in the sales process, with approximately $40.3 million worth of shares still available for issuance. Furthermore, the company is exploring development opportunities, including a potential 60,000-100,000 square foot facility, and remains focused on acquiring institutional-quality assets. Modiv maintains a strong dividend yield of 7.5%, reflecting its commitment to shareholder returns. Despite these positive developments, the company’s stock price experienced a decline, which might be attributed to broader market volatility. Analyst commentary from firms like Janney Montgomery Scott highlights Modiv’s ongoing strategic focus on disciplined growth and asset acquisitions.

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