STORE Capital (STOR) is an undervalued REIT with great long-term prospects, despite the currently challenging times. It is prudently managed and has been able to navigate the downturn without cutting its dividend. I believe it is well positioned to return to its late 2019 glory once we leave COVID-19 behind us, and that the current market price reflects the risks faced by its tenants, rather that the risks of STORE itself.
A superior business model
The company operates in the triple net lease space, where the tenant pays for all the expenses related to the property (taxes, insurance, and maintenance). STORE stands for Single Tenant Operational Real Estate, and it summarizes the company key feature: It leases to individual tenants, so a single default does not affect the others (as opposed to what would happen in a mall). Occupancy rates in the industry are close to 100%, and STORE is