company background image
LAND

Gladstone Land NasdaqGM:LAND Stock Report

Last Price

US$26.10

Market Cap

US$901.0m

7D

-1.2%

1Y

10.6%

Updated

15 Aug, 2022

Data

Company Financials +
LAND fundamental analysis
Snowflake Score
Valuation3/6
Future Growth1/6
Past Performance0/6
Financial Health4/6
Dividends3/6

LAND Stock Overview

Founded in 1997, Gladstone Land is a publicly traded real estate investment trust that acquires and owns farmland and farm-related properties located in major agricultural markets in the U.S.

Gladstone Land Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Gladstone Land
Historical stock prices
Current Share PriceUS$26.10
52 Week HighUS$42.10
52 Week LowUS$21.23
Beta0.80
1 Month Change9.94%
3 Month Change1.01%
1 Year Change10.64%
3 Year Change124.61%
5 Year Change94.78%
Change since IPO74.00%

Recent News & Updates

Aug 12

Gladstone Land: Growth Slowing, Debt Load Rising

Gladstone Land (LAND) is a REIT that buys farmland and rents it out to corporations and independent farmers, often the very farmers they bought the land from. Farmland REITs have outperformed the REIT average this year, but Gladstone Land has lagged, despite a hot first quarter. Gladstone's debt is now straining its earnings, leaving the company dependent on share issuance to pay off notes and maintain dividends. This article examines growth, balance sheet, dividend, and valuation metrics for this small-cap. There are only two Farmland REITs, and they are still very small, but together they have outperformed the REIT average thus far this year, losing just -0.21%, compared to the equity REIT index of -15.40%. Hoya Capital Income Builder However, Gladstone (LAND) has badly lagged its farmland REIT competitor Farmland Partners (FPI). FPI has been a stellar investment, with a total return of +21.51% YTD (year to date), compared to Gladstone Land, their mirror image at -21.77%. LAND data by YCharts What makes Gladstone tick, and what does the future hold for this small-cap REIT? This article examines growth, balance sheet, dividend, and valuation metrics, to shed light on the path ahead. Meet the company Gladstone Land Founded in 1997, Gladstone Land went public as a REIT in 2012. David Gladstone has been chairman and CEO since the company's inception. LAND buys well-watered, high-value farmland, typically fruit and vegetable producers, orchards, and vineyards, and leases the land to corporate and independent farmers on a triple-net basis. It is the modern version of sharecropping. Sellers can opt to receive shares of LAND instead of cash as payment. Leases range from 3 to 15 years, with options to extend. The weighted average remaining lease term is 6.5 years. Lease expirations average about 7.5% of annual base lease revenue per year for the next 5 years. Company investor presentation Gladstone currently owns 162 farms totaling 113,000 acres, spread across 15 U.S. states. The average farm size is just shy of 700 acres, and the portfolio is leased to 86 different tenants, with occupancy of 100%. States where Gladstone has corporate offices are shown in blue on the map below. Farm clusters are shown as yellow stars. Company investor presentation Geographic Distribution of LAND Assets (Company 10-Q) Gladstone focuses on farmland growing fresh produce (e.g., fruits and vegetables) and certain permanent crops (e.g., blueberries and nuts), because they expect such lands to deliver: higher profitability and rental income, lower price volatility, lower government dependency, and lower storage costs. Also, such ground is typically closer to major urban populations, enhancing development possibilities. Farmland investment makes sense at the most fundamental possible level, as the world population continues to grow, and the supply of arable land continues to shrink. Company investor presentation Company investor presentation Though more volatile than bonds, farmland investing is less volatile than stocks, as measured by the S&P 500, or REITs, according to NCREIF (the National Council of Real Estate Investment Fiduciaries). Company investor presentation Although Gladstone is a Farmland REIT, farmland bears a near-zero correlation with equity REITs over the past 20 years, according to the Center for Farmland Research. However, while farmland itself may be low in volatility, stock in Gladstone Land is not. The historic volatility of LAND stock according to TD Ameritrade is 41.2%, almost double that of the average REIT (24.3)%. Farmland is an asset class of its own, with very low correlations to stocks, bonds, and gold. Company investment presentation With just 164 farms thus far, LAND has barely scratched the total farmland market, as there are about 3,000 top-tier farms in vegetables and produce, and 6,625 top-tier farms in permanent crops, according to the U.S. Department of Agriculture. Thus Gladstone's market penetration is only about 1.7%. Company investment presentation Of the estimated $2.7 trillion worth of U.S. farmland, about 6 out of every 7 acres are still in the hands of families, but 40% of the land is farmed by tenants. Company investor presentation However, tellingly, farming is an old man's game at this point. The average farmer is 58 years old, and over 60% of farmers are over 55. Farmland devoted to fresh produce provides a measure of inflation protection and pricing power, as the annual CPI (Consumer Price Index) of fresh fruits and vegetables has risen faster over the past 40 years than the overall CPI or the CPI for food and beverages as a whole, according to the Bureau of Labor Statistics. Company investor presentation Since Q1 earnings were announced, Gladstone has acquired: a 1,374-acre olive orchard in California at a cost of $24.5 million, and leased it back for 15-years on a triple-net basis to California Olive Ranch, reported to be the largest miller of olives for extra virgin olive oil in the U.S., and 1,300 acres of farmland in Washington and Oregon, for approximately $37.3 million, from Horizon Vineyards, an affiliate of Resource Land. Quarterly results Here are the highlights for Q2 2022, according to the company's 10-Q : Total operating revenue of $20.3 million, up 20% YoY (year-over-year) 1H 2022 operating revenue of $40.2 million, up 22.2% YoY Total operating expenses of $12.2 million, up 28% YoY 34.5 million shares outstanding, up 17.6% YoY NOI (net operating income) of $8.1 million, up 9.9% YoY Net income of just $613 thousand, up from (-$531 thousand) YoY TCFO of $19.4 million, up 14.1 % YoY FFO of $48.2 million, up 24.6% YoY FFO per share of $0.14, up one penny (7.7%) YoY Estimated NAV per share of $15.60 Growth metrics Here are the 3-year growth figures for FFO (funds from operations), TCFO (total cash from operations), and market cap. Metric 2019 2020 2021 2022* 3-year CAGR FFO (millions) $10.41 $14.49 $21.01 $22.82 -- FFO Growth % - 39.2 45.0 8.6 29.90% FFO per share $0.54 $0.65 $0.69 $0.66 -- FFO per share growth % -- 20.4 6.2 (-4.4) 6.92% TCFO (millions) $21.37 $25.00 $32.38 $38.71 -- TCFO Growth % -- 17.0 29.5 19.5 21.90% Market Cap (billions) $0.27 $0.38 $1.15 $0.89 -- Market Cap Growth % -- 40.7 202.6 (-22.6) 48.82% * Estimated, based on figures for H1 2022 Source: TD Ameritrade, CompaniesMarketCap.com, and author calculations Prior to this year, LAND's 3-year growth in FFO, TCFO, and market cap were utterly jaw-dropping, but FFO/share growth, while strong, has not been in the same category. This means the company is issuing an unusually large number of new shares every year. Share count has increased by 17.6% over the past 12 months alone. As we will see below, when we look at Valuation Metrics, they have every incentive to continue doing that. While cash flow continues to grow at a healthy pace, this year's FFO growth has slowed considerably, and FFO/share and market cap are in danger of taking a step backward. Despite its meteoric growth in market share, LAND is still a small-cap, yet to cross the $1.4 billion threshold where it reaches escape velocity. Though too small to qualify as a FROG, Gladstone Land is definitely a Tadpole with legs. Meanwhile, here is how the stock price has done over the past 3 twelve-month periods, compared to the REIT average as represented by the Vanguard Real Estate ETF (VNQ). Metric 2019 2020 2021 2022 3-yr CAGR LAND share price Aug. 8 $11.68 $16.50 $23.78 $26.43 -- LAND share price Gain % -- 41.3 44.1 11.1 31.29% VNQ share price Aug. 8 $90.96 $82.39 $106.91 $98.20 -- VNQ share price Gain % -- (-9.4) 29.8 (-8.1) 2.59% Source: MarketWatch.com and author calculations LAND shares have sold off sharply since April. From a high of $42.10 on April 20, the price plunged to $21.23 on June 16. That's a loss of (-49.6)% in under two months, from which shares have only slightly recovered. Seeking Alpha Premium Despite the sharp sell-off, LAND has easily outpaced the VNQ in each of the past 3 years, and has rewarded investors with an annual average of 31.29% share price growth, compared to just 2.59% for the VNQ. In its 10 years in operation, LAND has grown its holdings approximately 20-fold. Company investor presentation The company's return on equity has been just 0.79% over the past 12 months, however, even while assets have grown 22.15%. Balance sheet metrics Here are the key balance sheet metrics. Company Liquidity Ratio Debt Ratio Debt/EBITDA Bond Rating LAND 1.86 33% N/A -- Source: Hoya Capital Income Builder, TD Ameritrade, and author calculations Gladstone Land has an abysmal 10 times more long debt than EBITDA (1088%), according to Seeking Alpha Premium, so it will be hard for them to make their debt payments without issuing more shares, restricting the dividend, or selling assets.

Jul 25

Gladstone Land acquires vineyards in Washington, Oregon for $37.3M

Gladstone Land (NASDAQ:LAND) said Monday it acquired 1.3K gross acres of farmland in Washington and Oregon, for ~$37.3M from Horizon Vineyards, an affiliate of Resource Land. LAND also assumed several long-term, triple-net vineyard leases with a grower.

Jul 18

Gladstone Land raises dividend 0.4% to $0.0456 dividend

Gladstone Land (NASDAQ:LAND) declares $0.0456/share monthly dividend, 0.4% increase from prior dividend of $0.0454. Payable July 29; for shareholders of record July 22; ex-div July 21. Payable Aug 31; for shareholders of record Aug 23; ex-div Aug 22. Payable Sep 30; for shareholders of record Sep 22; ex-div Sep 21.

Shareholder Returns

LANDUS REITsUS Market
7D-1.2%4.0%3.6%
1Y10.6%-3.2%-9.6%

Return vs Industry: LAND exceeded the US REITs industry which returned -3.6% over the past year.

Return vs Market: LAND exceeded the US Market which returned -10.2% over the past year.

Price Volatility

Is LAND's price volatile compared to industry and market?
LAND volatility
LAND Average Weekly Movement5.8%
REITs Industry Average Movement4.3%
Market Average Movement7.7%
10% most volatile stocks in US Market16.9%
10% least volatile stocks in US Market3.2%

Stable Share Price: LAND is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: LAND's weekly volatility (6%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1997n/aDavid Gladstonehttps://www.gladstonefarms.com

Founded in 1997, Gladstone Land is a publicly traded real estate investment trust that acquires and owns farmland and farm-related properties located in major agricultural markets in the U.S. and leases its properties to unrelated third-party farmers. The Company, which reports the aggregate fair value of its farmland holdings on a quarterly basis, currently owns 127 farms, comprised of approximately 94,000 acres in 13 different states, valued at approximately $1.0 billion. Gladstone Land's farms are predominantly located in regions where its tenants are able to grow fresh produce annual row crops, such as berries and vegetables, which are generally planted and harvested annually.

Gladstone Land Fundamentals Summary

How do Gladstone Land's earnings and revenue compare to its market cap?
LAND fundamental statistics
Market CapUS$900.97m
Earnings (TTM)-US$9.69m
Revenue (TTM)US$82.56m

10.9x

P/S Ratio

-92.9x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
LAND income statement (TTM)
RevenueUS$82.56m
Cost of RevenueUS$10.26m
Gross ProfitUS$72.30m
Other ExpensesUS$82.00m
Earnings-US$9.69m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)-0.28
Gross Margin87.57%
Net Profit Margin-11.74%
Debt/Equity Ratio110.6%

How did LAND perform over the long term?

See historical performance and comparison

Dividends

2.1%

Current Dividend Yield

135%

Payout Ratio

Does LAND pay a reliable dividends?

See LAND dividend history and benchmarks
When do you need to buy LAND by to receive an upcoming dividend?
Gladstone Land dividend dates
Ex Dividend DateAug 22 2022
Dividend Pay DateAug 31 2022
Days until Ex dividend5 days
Days until Dividend pay date14 days

Does LAND pay a reliable dividends?

See LAND dividend history and benchmarks
We’ve recently updated our valuation analysis.

Valuation

Is LAND undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for LAND?

Other financial metrics that can be useful for relative valuation.

LAND key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue19x
Enterprise Value/EBITDA24.5x
PEG Ration/a

Price to Sales Ratio vs Peers

How does LAND's PS Ratio compare to its peers?

LAND PS Ratio vs Peers
The above table shows the PS ratio for LAND vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPSEstimated GrowthMarket Cap
Peer Average10x
STSF.F SmartStop Self Storage REIT
7.6xn/aUS$1.6b
FPI Farmland Partners
14.2x6.5%US$830.6m
CTT CatchMark Timber Trust
5.8x0.7%US$551.9m
SAFE Safehold
12.3x25.7%US$2.9b
LAND Gladstone Land
10.9x16.8%US$901.0m

Price-To-Sales vs Peers: LAND is expensive based on its Price-To-Sales Ratio (10.9x) compared to the peer average (10x).


Price to Earnings Ratio vs Industry

How does LAND's PE Ratio compare vs other companies in the US REITs Industry?

Price-To-Sales vs Industry: LAND is expensive based on its Price-To-Sales Ratio (10.9x) compared to the US REITs industry average (5.9x)


Price to Sales Ratio vs Fair Ratio

What is LAND's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

LAND PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio10.9x
Fair PS Ratio11.4x

Price-To-Sales vs Fair Ratio: LAND is good value based on its Price-To-Sales Ratio (10.9x) compared to the estimated Fair Price-To-Sales Ratio (11.4x).


Share Price vs Fair Value

What is the Fair Price of LAND when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: LAND ($26.1) is trading below our estimate of fair value ($33.42)

Significantly Below Fair Value: LAND is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.


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Future Growth

How is Gladstone Land forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


39.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LAND is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: LAND is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: LAND is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: LAND's revenue (16.8% per year) is forecast to grow faster than the US market (7.9% per year).

High Growth Revenue: LAND's revenue (16.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if LAND's Return on Equity is forecast to be high in 3 years time


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Past Performance

How has Gladstone Land performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-60.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: LAND is currently unprofitable.

Growing Profit Margin: LAND is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: LAND is unprofitable, and losses have increased over the past 5 years at a rate of 60% per year.

Accelerating Growth: Unable to compare LAND's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: LAND is unprofitable, making it difficult to compare its past year earnings growth to the REITs industry (47.9%).


Return on Equity

High ROE: LAND has a negative Return on Equity (0.81%), as it is currently unprofitable.


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Financial Health

How is Gladstone Land's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Stable Cash Runway

  • Forecast Cash Runway

Financial Position Analysis

Short Term Liabilities: LAND's short term assets ($54.7M) exceed its short term liabilities ($17.6M).

Long Term Liabilities: LAND's short term assets ($54.7M) do not cover its long term liabilities ($740.8M).


Debt to Equity History and Analysis

Debt Level: LAND's net debt to equity ratio (102.2%) is considered high.

Reducing Debt: LAND's debt to equity ratio has reduced from 286.7% to 110.6% over the past 5 years.


Balance Sheet


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable LAND has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: LAND is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 30.9% per year.


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Dividend

What is Gladstone Land current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


2.10%

Current Dividend Yield

Upcoming Dividend Payment

TodayAug 16 2022Ex Dividend DateAug 22 2022Dividend Pay DateAug 31 20229 days from Ex DividendBuy in the next 5 days to receive the upcoming dividend

Dividend Yield vs Market

Notable Dividend: LAND's dividend (2.1%) is higher than the bottom 25% of dividend payers in the US market (1.47%).

High Dividend: LAND's dividend (2.1%) is low compared to the top 25% of dividend payers in the US market (3.95%).


Stability and Growth of Payments

Stable Dividend: LAND's dividend payments have been volatile in the past 10 years.

Growing Dividend: LAND's dividend payments have increased over the past 10 years.


Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (135.1%), LAND's dividend payments are not well covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (54.3%), LAND's dividend payments are covered by cash flows.


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Management

How experienced are the management team and are they aligned to shareholders interests?

9.4yrs

Average management tenure


CEO

David Gladstone (80 yo)

25.58yrs

Tenure

US$57,750

Compensation

Mr. David John Gladstone has served as Chief Executive Officer, President and Chairman of the Board of Directors at Gladstone Companies, Inc. since its inception in 2009. He has been the Chief Executive Of...


Leadership Team

Experienced Management: LAND's management team is seasoned and experienced (9.4 years average tenure).


Board Members

Experienced Board: LAND's board of directors are considered experienced (9.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 9.5%.


Top Shareholders

Company Information

Gladstone Land Corporation's employee growth, exchange listings and data sources


Key Information

  • Name: Gladstone Land Corporation
  • Ticker: LAND
  • Exchange: NasdaqGM
  • Founded: 1997
  • Industry: Specialized REITs
  • Sector: Real Estate
  • Implied Market Cap: US$900.974m
  • Market Cap: US$900.974m
  • Shares outstanding: 34.52m
  • Website: https://www.gladstonefarms.com

Location

  • Gladstone Land Corporation
  • 1521 Westbranch Drive
  • Suite 100
  • McLean
  • Virginia
  • 22102
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/15 00:00
End of Day Share Price2022/08/15 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.