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DEA

Easterly Government Properties NYSE:DEA Stock Report

Last Price

US$15.77

Market Cap

US$1.6b

7D

-5.3%

1Y

-24.4%

Updated

02 Oct, 2022

Data

Company Financials +
DEA fundamental analysis
Snowflake Score
Valuation3/6
Future Growth3/6
Past Performance3/6
Financial Health1/6
Dividends4/6

DEA Stock Overview

Easterly Government Properties, Inc. (NYSE:DEA) is based in Washington, D.C., and focuses primarily on the acquisition, development and management of Class A commercial properties that are leased to the U.S.

Easterly Government Properties Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Easterly Government Properties
Historical stock prices
Current Share PriceUS$15.77
52 Week HighUS$23.65
52 Week LowUS$15.32
Beta0.54
1 Month Change-11.01%
3 Month Change-18.84%
1 Year Change-24.40%
3 Year Change-27.29%
5 Year Change-23.37%
Change since IPO1.74%

Recent News & Updates

Sep 30

The 6.7% Yield Of Easterly Government Properties Should Be Recession-Resistant

Summary DEA is offering a 7-year high dividend yield of 6.7%, with a wide margin of safety. DEA is a unique REIT, as it leases all its properties to U.S. government agencies. It thus has the lowest possible tenant risk while it enjoys reliable and predictable cash flows. Income-oriented investors are going through a rough period this year due to the surge of inflation, which erodes the real value of their portfolios and their income streams. It is thus natural that these investors are doing their best to shield their portfolios from inflation. The dividend yields of most stocks have greatly increased this year due to the ongoing bear market, but investors should make sure that a dividend is safe before investing in a high-yield stock. Easterly Government Properties, Inc. (DEA) is offering a 7-year high dividend yield of 6.7%, which should be safe given that the real estate investment trust ("REIT") leases all its properties to U.S. government agencies. As there is no other REIT with 99% occupancy and such a safe tenant profile, investors should lock in the 6.7% yield of the stock before it reverts to normal levels. Business overview Easterly Government Properties is a REIT which acquires and develops properties that are leased to U.S. government agencies, such as the FBI, IRS and DEA. The REIT was originally formed in 2011 as Easterly Partners and then changed its name to Easterly Government Properties in early 2015. Thanks to its unique business model, Easterly enjoys some key competitive advantages when compared to the vast majority of REITs. It leases its properties to U.S. government agencies for at least a decade, and thus it enjoys predictable cash flows, without the usual risk of incurring a default of its tenant. In addition, as the government agencies rarely move to another building, the risk of having vacant properties is extremely low. This helps explain the 100% occupancy rate that Easterly has posted in most years. The occupancy rate of the trust currently stands at 99%. Moreover, Easterly has a wide business moat, with high barriers to entry thanks to its expertise in the procurement process, protocols and culture of government agencies. The high barriers to entry somewhat enhance the negotiating power of the REIT. This helps explain the fact that Easterly has its rent structured to rise with inflation. This is undoubtedly an important feature of the leases, which mitigates the impact of inflation on the real value of the cash flows of the REIT. Apart from being resistant to inflation, Easterly is also essentially immune to recessions. While recessions may exert some pressure on the budget of the government, the latter is the most recession-resistant tenant in the entire universe. As a result, Easterly is not affected by economic downturns. The REIT has a short history but it was tested in the fierce recession caused by the pandemic and the resultant lockdowns in 2020. While other REITs incurred a material decrease in their funds from operations [FFO] per unit, Easterly grew its FFO per unit 5% in that year. This is a testament to the resilience of this high-quality REIT to economic downturns. Moreover, Easterly does not rest on its laurels. It continuously tries to acquire new properties, which are essential to the mission of select government agencies. It also achieves growth thanks to its inflation-adjusted reimbursement and its lease renewal spreads. Since its IPO under its current form, in 2015, Easterly has grown its FFO per unit in 5 of the 6 years, at a 3.9% average annual rate. This growth rate may seem unappealing to most investors but it is decent, especially when combined with the aforementioned advantages of the REIT. On the other hand, it is important to note that growth momentum has somewhat decelerated lately, primarily due to fewer acquisitions of new properties and the issuance of new units. As a result, Easterly is expected by analysts to grow its FFO per unit by only 2% per year on average over the next 3 years. As Easterly is laser focused on properties leased to government agencies, it obviously cannot grow as fast as other REITs, which have a much broader scope. The inferior growth prospects of the REIT when compared to its peers is a point of concern. On the bright side, the market of federally-leased properties is highly fragmented. The largest owners of this type of properties own 26.2% of these properties, with no landlord owning more than 5.4%. Easterly Government Properties Growth (Investor Presentation) As a result, there is ample room for future growth for Easterly via the acquisition of properties from small owners. Valuation While Easterly is essentially immune to recessions, its stock price is not immune to the ongoing bear market, which has resulted primarily from the increasing risk of an upcoming recession due to the aggressive interest rate hikes by the Fed. The stock of Easterly has declined 33% this year and thus it is trading at a historic (7-year) low, at a price-to-FFO ratio of 11.5. This FFO multiple, which is a 7-year low, is much lower than the historical average of 16.6 of the stock. The exceptionally cheap valuation level of the REIT can be partly justified by high inflation, which reduces the present value of future cash flows and thus exerts pressure on the valuation of most stocks. However, this headwind is likely to prove short-lived. The Fed has prioritized restoring inflation to its long-term target of 2%, even at the expense of economic growth. Given its determination, which is evident in its aggressive interest rate hikes, it is safe to assume that inflation will soon begin to subside. When that happens, the valuation of Easterly will probably begin to revert towards its historical average. Overall, the stock will enjoy a major valuation tailwind when inflation subsides. Dividend Due to the decline of its stock price this year, Easterly is currently offering a 7-year high dividend yield of 6.7%. Data by YCharts When a stock offers such a high yield, it usually signals that a dividend cut is just around the corner. However, this is not the case for Easterly. Its FAD payout ratio is somewhat elevated, at 75%, but the dividend has a wide margin of safety thanks to the resilience of the REIT to recessions and its predictable cash flows, which result from the reliability of the U.S. government.

Aug 24

Easterly Government Properties acquires district courthouse in Iowa

Easterly Government Properties (NYSE:DEA) said Wednesday it acquired a 28.9K leased sq. ft. U.S. District courthouse in Council Bluffs, Iowa. The courthouse is a build-to-suit facility that is 100% leased to the General Services Administration on behalf of the U.S. District Court under a 20-year non-cancelable lease that will expire in 2041. The lease also features two five-year renewal options that, if exercised, will extend the lease till 2051. Year to date, DEA acquired, either directly or through its joint venture, six properties for pro rata contractual purchase price of ~$179.1M YTD. With the acquisition of the courthouse in Council Bluffs, DEA owns 95 properties totaling 9.1M sq. ft.

Shareholder Returns

DEAUS REITsUS Market
7D-5.3%-4.1%-2.5%
1Y-24.4%-20.4%-23.2%

Return vs Industry: DEA underperformed the US REITs industry which returned -20.4% over the past year.

Return vs Market: DEA underperformed the US Market which returned -23.2% over the past year.

Price Volatility

Is DEA's price volatile compared to industry and market?
DEA volatility
DEA Average Weekly Movement3.2%
REITs Industry Average Movement4.2%
Market Average Movement6.8%
10% most volatile stocks in US Market15.5%
10% least volatile stocks in US Market2.8%

Stable Share Price: DEA is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: DEA's weekly volatility (3%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
n/a53Bill Trimblehttps://www.easterlyreit.com

Easterly Government Properties, Inc. (NYSE:DEA) is based in Washington, D.C., and focuses primarily on the acquisition, development and management of Class A commercial properties that are leased to the U.S. Government. Easterly’s experienced management team brings specialized insight into the strategy and needs of mission-critical U.S.

Easterly Government Properties Fundamentals Summary

How do Easterly Government Properties's earnings and revenue compare to its market cap?
DEA fundamental statistics
Market CapUS$1.61b
Earnings (TTM)US$28.89m
Revenue (TTM)US$288.03m

49.5x

P/E Ratio

5.0x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
DEA income statement (TTM)
RevenueUS$288.03m
Cost of RevenueUS$94.21m
Gross ProfitUS$193.82m
Other ExpensesUS$164.93m
EarningsUS$28.89m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)0.32
Gross Margin67.29%
Net Profit Margin10.03%
Debt/Equity Ratio92.7%

How did DEA perform over the long term?

See historical performance and comparison

Dividends

6.7%

Current Dividend Yield

73%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is DEA 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-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings 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 DEA?

Other financial metrics that can be useful for relative valuation.

DEA 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/Revenue10.2x
Enterprise Value/EBITDA17.6x
PEG Ratio2.9x

Price to Earnings Ratio vs Peers

How does DEA's PE Ratio compare to its peers?

DEA PE Ratio vs Peers
The above table shows the PE ratio for DEA vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average39.7x
PDM Piedmont Office Realty Trust
27.4x-11.4%US$1.3b
OFC Corporate Office Properties Trust
25.9x-1.0%US$2.6b
JBGS JBG SMITH Properties
32.4xn/aUS$2.4b
BDN Brandywine Realty Trust
73.1x12.6%US$1.2b
DEA Easterly Government Properties
49.5x16.8%US$1.6b

Price-To-Earnings vs Peers: DEA is expensive based on its Price-To-Earnings Ratio (49.5x) compared to the peer average (39.7x).


Price to Earnings Ratio vs Industry

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

Price-To-Earnings vs Industry: DEA is expensive based on its Price-To-Earnings Ratio (49.5x) compared to the US REITs industry average (25.8x)


Price to Earnings Ratio vs Fair Ratio

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

DEA PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio49.5x
Fair PE Ratio39.8x

Price-To-Earnings vs Fair Ratio: DEA is expensive based on its Price-To-Earnings Ratio (49.5x) compared to the estimated Fair Price-To-Earnings Ratio (39.8x).


Share Price vs Fair Value

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

Below Fair Value: DEA ($15.77) is trading below our estimate of fair value ($46.37)

Significantly Below Fair Value: DEA 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 more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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Future Growth

How is Easterly Government Properties forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


16.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DEA's forecast earnings growth (16.8% per year) is above the savings rate (1.9%).

Earnings vs Market: DEA's earnings (16.8% per year) are forecast to grow faster than the US market (14.8% per year).

High Growth Earnings: DEA's earnings are forecast to grow, but not significantly.

Revenue vs Market: DEA's revenue (8.9% per year) is forecast to grow faster than the US market (7.7% per year).

High Growth Revenue: DEA's revenue (8.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: DEA's Return on Equity is forecast to be low in 3 years time (2.7%).


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Past Performance

How has Easterly Government Properties performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


45.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: DEA has high quality earnings.

Growing Profit Margin: DEA's current net profit margins (10%) are higher than last year (8.2%).


Past Earnings Growth Analysis

Earnings Trend: DEA's earnings have grown significantly by 45.4% per year over the past 5 years.

Accelerating Growth: DEA's earnings growth over the past year (34.9%) is below its 5-year average (45.4% per year).

Earnings vs Industry: DEA earnings growth over the past year (34.9%) underperformed the REITs industry 45.8%.


Return on Equity

High ROE: DEA's Return on Equity (2.3%) is considered low.


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Financial Health

How is Easterly Government Properties's financial position?

Financial Health Score

1/6

Financial Health Score 1/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: DEA's short term assets ($77.9M) exceed its short term liabilities ($54.7M).

Long Term Liabilities: DEA's short term assets ($77.9M) do not cover its long term liabilities ($1.4B).


Debt to Equity History and Analysis

Debt Level: DEA's net debt to equity ratio (92.1%) is considered high.

Reducing Debt: DEA's debt to equity ratio has increased from 80.2% to 92.7% over the past 5 years.

Debt Coverage: DEA's debt is not well covered by operating cash flow (9.4%).

Interest Coverage: DEA's interest payments on its debt are not well covered by EBIT (1.8x coverage).


Balance Sheet


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Dividend

What is Easterly Government Properties's current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


6.72%

Current Dividend Yield

Dividend Yield vs Market

Easterly Government Properties Dividend Yield vs Market
How does Easterly Government Properties dividend yield compare to the market?
SegmentDividend Yield
Company (Easterly Government Properties)6.7%
Market Bottom 25% (US)1.7%
Market Top 25% (US)4.7%
Industry Average (REITs)4.1%
Analyst forecast in 3 Years (Easterly Government Properties)6.8%

Notable Dividend: DEA's dividend (6.72%) is higher than the bottom 25% of dividend payers in the US market (1.67%).

High Dividend: DEA's dividend (6.72%) is in the top 25% of dividend payers in the US market (4.73%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, DEA has been paying a dividend for less than 10 years.

Growing Dividend: DEA's dividend payments have increased, but the company has only paid a dividend for 7 years.


Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (72.7%), DEA's dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: At its current cash payout ratio (85.8%), DEA'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?

6.9yrs

Average management tenure


CEO

Bill Trimble (60 yo)

7.67yrs

Tenure

US$4,988,474

Compensation

Mr. William C. Trimble, also known as Bill, III, serves as the Chief Executive Officer, President and Director of Easterly Government Properties, Inc. since February 5, 2015. Mr. Trimble is responsible for...


CEO Compensation Analysis

Bill Trimble's Compensation vs Easterly Government Properties Earnings
How has Bill Trimble's remuneration changed compared to Easterly Government Properties's earnings?
DateTotal Comp.SalaryCompany Earnings
Jun 30 2022n/an/a

US$29m

Mar 31 2022n/an/a

US$30m

Dec 31 2021US$5mUS$750k

US$30m

Sep 30 2021n/an/a

US$25m

Jun 30 2021n/an/a

US$21m

Mar 31 2021n/an/a

US$17m

Dec 31 2020US$4mUS$750k

US$12m

Sep 30 2020n/an/a

US$11m

Jun 30 2020n/an/a

US$7m

Mar 31 2020n/an/a

US$9m

Dec 31 2019US$4mUS$725k

US$7m

Sep 30 2019n/an/a

US$6m

Jun 30 2019n/an/a

US$7m

Mar 31 2019n/an/a

US$3m

Dec 31 2018US$2mUS$525k

US$5m

Sep 30 2018n/an/a

US$6m

Jun 30 2018n/an/a

US$5m

Mar 31 2018n/an/a

US$4m

Dec 31 2017US$1mUS$450k

US$4m

Sep 30 2017n/an/a

US$5m

Jun 30 2017n/an/a

US$5m

Mar 31 2017n/an/a

US$4m

Dec 31 2016US$1mUS$351k

US$4m

Sep 30 2016n/an/a

US$2m

Jun 30 2016n/an/a

US$2m

Mar 31 2016n/an/a

US$2m

Dec 31 2015US$3mUS$223k

-US$1m

Compensation vs Market: Bill's total compensation ($USD4.99M) is about average for companies of similar size in the US market ($USD5.58M).

Compensation vs Earnings: Bill's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: DEA's management team is seasoned and experienced (6.9 years average tenure).


Board Members

Experienced Board: DEA's board of directors are considered experienced (7.7 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.


Recent Insider Transactions

NYSE:DEA Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
15 Mar 22SellUS$139,356Darrell CrateIndividual6,655US$20.94

Ownership Breakdown

What is the ownership structure of DEA?
Owner TypeNumber of SharesOwnership Percentage
Individual Insiders347,4620.4%
General Public7,701,9948.5%
Institutions82,723,25091.1%

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 8.2%.


Top Shareholders

Top 25 shareholders own 69.11% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
18.36%
BlackRock, Inc.
16,662,604$262.8m2.03%0.01%
11.46%
The Vanguard Group, Inc.
10,398,459$164.0m0.22%no data
6.25%
State Street Global Advisors, Inc.
5,669,146$89.4m3.72%no data
4.6%
Foresight Group LLP
4,173,692$65.8m0%4.51%
2.9%
Federated Hermes, Inc.
2,629,811$41.5m37.62%0.13%
2.16%
GW&K Investment Management, LLC
1,958,225$30.9m-10.93%0.33%
1.99%
Geode Capital Management, LLC
1,808,730$28.5m1.52%no data
1.65%
Dimensional Fund Advisors LP
1,496,709$23.6m-1.28%0.01%
1.58%
Palisade Capital Management LLC
1,437,489$22.7m-1.26%0.77%
1.55%
American Century Investment Management Inc
1,410,990$22.3m-5.92%0.02%
1.37%
FMR LLC
1,241,972$19.6m-8.21%no data
1.36%
Charles Schwab Investment Management, Inc.
1,232,948$19.4m4.63%0.01%
1.27%
BNY Mellon Asset Management
1,154,217$18.2m-0.45%no data
1.26%
Janus Henderson Group plc
1,147,909$18.1m-23.86%0.01%
1.26%
Northern Trust Global Investments
1,144,816$18.1m3.09%no data
1.25%
Invesco Capital Management LLC
1,138,053$17.9m-7.37%0.01%
1.21%
Balyasny Asset Management L.P.
1,097,177$17.3m71.69%0.08%
1.2%
Ranger Global Real Estate Advisors, LLC
1,093,526$17.2m0%1.21%
1.18%
Victory Capital Management Inc.
1,069,660$16.9m-1.15%0.02%
0.98%
Tributary Capital Management, LLC
890,982$14.1m6.38%1.41%
0.95%
Morgan Stanley, Investment Banking and Brokerage Investments
866,315$13.7m11.44%no data
0.88%
Sanlam FOUR Investments UK Limited
794,489$12.5m0%0.9%
0.82%
DePrince, Race & Zollo, Inc.
746,865$11.8m12.91%0.28%
0.81%
Legal & General Investment Management Limited
733,809$11.6m7.38%no data
0.81%
Mirae Asset Global Investments Co., Ltd
731,008$11.5m11.81%0.02%

Company Information

Easterly Government Properties, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Easterly Government Properties, Inc.
  • Ticker: DEA
  • Exchange: NYSE
  • Founded: NaN
  • Industry: Office REITs
  • Sector: Real Estate
  • Implied Market Cap: US$1.607b
  • Market Cap: US$1.431b
  • Shares outstanding: 101.92m
  • Website: https://www.easterlyreit.com

Number of Employees


Location

  • Easterly Government Properties, Inc.
  • 2101 L Street NW
  • Suite 650
  • Washington
  • District Of Columbia
  • 20037
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
DEANYSE (New York Stock Exchange)YesCommon StockUSUSDFeb 2015
E05DB (Deutsche Boerse AG)YesCommon StockDEEURFeb 2015

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/10/02 00:00
End of Day Share Price2022/09/30 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.