Essential Properties Realty Trust, Inc. — Cyborg Score 7/10

Strong
Real Estate Investment Trust (REIT) - Net Lease Properties

Strategic Profile

The company has demonstrated consistent revenue growth with a 3-year growth rate of 9% and maintains a strong operating margin of 63.61% and net margin of 45.25%. The company leverages its deep relationships with middle-market operators and focus on essential, service-based industries to navigate market volatility.

Cyborg Score Rationale

The company reported $296 million in investments with 85% sourced from existing relationships, yielding an average initial cash yield of 7.7% and a GAAP yield of 9.1%. However, the Altman Z-Score of 1.67 places the company in the distress zone, suggesting potential risk of financial instability.

Top Insights

  • Portfolio is 99.7% leased to tenants operating 659 different concepts across 48 states, demonstrating significant geographic and tenant diversification
  • 2026 AFFO per share guidance of $1.99-$2.04 significantly exceeds consensus estimates of $1.60
  • Year-end leverage projected to remain comfortably below 4.0x, providing significant capital runway into 2026
  • Quarterly dividend increased by approximately 3% to $0.31 per share in December 2025

Named Competitors

  • NNN REIT — Triple-net lease REIT focused on single-tenant retail properties
  • NETSTREIT — Diversified net lease REIT with emphasis on essential retail
  • Broadstone Net Lease — Net lease REIT acquiring single-tenant commercial properties
  • Four Corners Property Trust — Net lease REIT focusing on triple-net and double-net properties

Recent Developments

  • (February 2026) Raised FY 2026 AFFO per share guidance to $1.99-$2.04, significantly above consensus estimate of $1.60
  • (December 2025) Increased quarterly dividend to $0.31 per share, an increase of approximately 3% over prior quarter
  • (December 2025) Q4 2025 reported $296 million in investments with 85% sourced from existing relationships at 7.7% average initial yield

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