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Evaluating Store Capital’s Revenue and Income Rise in 3Q15

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Nov. 13 2015, Updated 10:57 a.m. ET

Store Capital’s price movements

Store Capital Corporation (STOR) has a market cap of $2.8 billion. Store Capital’s YTD (year-to-date) price movement in 2015 shows a mix of rises and falls, but after its fiscal 3Q15 earnings report, STOR rose by 0.74% to close at $21.82 per share on November 12, 2015. The price movement of the company’s stock on a weekly, monthly, and YTD basis was -2.8%, 2.1%, and 4.7%, respectively, as of the same date.

Technically, as of November 12, Store Capital’s stock broke the support of 20-day, 50-day, and 200-day moving averages in 2015. It was trading at -2.2% below the 20-day moving average, 2.0% above the 50-day moving average, and 2.9% above the 200-day moving average as of the same date.

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The Guggenheim Insider Sentiment ETF (NFO) invests 1.1% of its holdings in Store Capital. The ETF tracks an equal-weighted index of the 100 US stocks selected by increases in earnings estimates and publicly available buying trends of corporate insiders. The YTD price movement of NFO was -1.5%, as of November 11, 2015.

The following shows breakdown of Store Capital’s competitors and their respective market caps:

  • Realty Income Corporation (O)—$11.8 billion
  • DDR Corporation (DDR)—$6.0 billion
  • National Retail Properties (NNN)—$5.0 billion
  • Retail Properties of America (RPAI)—$3.5 billion

Performance in fiscal 3Q15

The company reported revenues of $74.8 million in fiscal 3Q15, a YoY (year-over-year) rise of 8.6% compared to its revenues of $68.9 million in fiscal 2Q15. Revenues from rents and interest income on loans and direct financing receivables rose by 7.8% and 22.4%, respectively, YoY in 3Q15.

On a YoY basis, Store Capital’s net income and EPS (earnings per share) rose to $23.0 million and $0.18 per share, respectively, in 3Q15, compared to its net income and EPS of $19.6 million and $0.17 per share, respectively, in 2Q15. On a quarterly basis, the company’s revenues and EPS rose by 47.0% and 38.5%, respectively, in 3Q15, compared to its revenue and EPS in 3Q14.

Meanwhile, the company’s real estate investments rose by 7.0%, but its cash and cash equivalents fell by 56.2% in 3Q15 on a quarterly basis. Its debt-to-equity ratio rose to 1.06 in 3Q15 YoY, compared to the debt-to-equity ratio of 0.95 in 2Q15.

Store Capital has declared a regular quarterly dividend of $0.25 per share on its common stock. The company has projected an EPS of $0.67–$0.68 per share and $0.74–$0.77 per share for fiscal 2015 and fiscal 2016, respectively.

About Store Capital

Store Capital Corporation is a net-lease REIT (real estate investment trust). It specializes in the acquisition, investment, and management of Single Tenant Operational Real Estate.

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