Gladstone Land: Still Worth Watching (NASDAQ:LAND)

Gladstone Land: Still Worth Watching (NASDAQ:LAND)

alabn/iStock via Getty Images

Written by Nick Ackerman. This article was originally published on January 16, 2023 to members of Cash Builder Opportunities.

I last covered Gladstone Land (NASDAQ:LAND) for Cash Builder Opportunity members on May 23, 2022. Later it was posted to the public on June 6, 2022. Shares closed at $25.46 after that article was published. Since then, the price has continued to fall. To be fair, the overall market went in the same direction, but to a much smaller extent.

LAND performance since previous update (search alpha)

This REIT is quite simple, but at the same time unique. They invest in farmland across the U.S. There aren’t too many publicly traded REITs that I know of that specialize in this interesting area of ​​the market. Farmland Partners (FPI) is another one for investors to check out.

In the case of LAND, they target “primarily fruit and vegetable crops in regions with established rental markets and strong operations.” Their goal is to “build the premier farmland real estate company focused on the ownership of high-quality farms and farm-related properties leased on a triple-net basis to tenants with strong operating histories and deep farming resources. All of our farms has abundant water resources and is currently 100% occupied.”

Water, water not everywhere

We believe this reflects strongly on our pre-acquisition due diligence process, which always begins with a comprehensive water analysis. We continue to actively monitor the ongoing drought in the western US, and all of our farms continue to have sufficient water at this time.

While we’re all hoping for winter, and it looks like it’s coming because it’s raining now in California, to alleviate the drought in the West, we’ve been focused on increasing the water security of our current portfolio of assets. This may include, but is not limited to, buying the water on the open market. We can buy water and put it out on our farms. Or more importantly, purchasing long-term water contracts and obtaining additional water credits through the purchase of additional open land.

However, as almond prices remain low during oversupply. Believe it or not, there may be an oversupply of almonds along with the increase in the cost of water due to the decreasing supply of both groundwater and surface water, some of our almond farmers are starting to experience decreases in production, meaning they are harvesting less.

What is a good price?

LAND debt statistics (Gladstone Land)


FOF FFO estimates (seeking alpha)

LAND Fair Value Estimate Based on P/FFO History (Portfolio Insight)

Valuation on a yield basis

LAND Fair Value Estimate Based on Yield (Portfolio Insight)

LAND Dividend And Basic FFO/Share (Portfolio Insight)

Finally, about our general distributions. We recently increased our common dividend again to $0.0458 per share per month. Over the past 31 quarters, we have increased our common dividend 28x and this has resulted in an overall increase of over 52% over this period.


Leave a Reply

Your email address will not be published. Required fields are marked *