Is Gladstone Land a good stock to buy

Is Gladstone Land Corp (LAND) A Good Investment In 2022?

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For those looking to gain exposure to farmland as an asset class, the publicly traded REIT Gladstone Partners Corp (LAND) may seem tempting.

As an REIT, it trades on the same exchanges as stocks giving you a high level of liquidity. It is perhaps the easiest way out there to gain exposure to farmland.

However, publicly traded REITs come with a few downsides you ought to be aware of:

  1. Since they trade on the same exchanges as stocks, they are susceptible to the same ups and downs. Publicly traded REITs are heavily correlated with the stock market.
  2. Often times, these REITs underperform private or less liquid real estate investments.

With that in mind, this REIT still gives you exposure to farmland as an asset class, which is a great way to diversify a portfolio.

In this article, we provide a look at Gladstone Land as an investment. Let's jump right in!

What Is Gladstone Land Corp (LAND)?

Gladstone Land Corp owns farmland and farm related facilities across 15 different US states. Currently, the trust owns 164 different farms totaling over 113,000 acres of land. In addition to that, they own 20,000 acre-feet of banked water in California, which is valued around $1.5 Billion.

Currently, 100% of that acreage is fully leased.

Rental agreements with farmers also stipulate in most cases that the farmers are responsible for paying rent, insurance, maintenance and taxes. This minimizes the costs that are paid out of the trust and keeps profits high.

Gladstone Land Corp primarily purchases farmland used to grow healthy foods such as fruit, nuts and vegetables. They are also only 1 of 4 public companies managed by an SEC-registered investment advisor.

They have a team of 70 professionals collectively managing $3.5 Billion in assets.

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Dividend

One of the main benefits of an REIT is the high dividend. LAND is no different and offers investors an attractive dividend yield.

  • Currently, Gladstone Land Corp pays a quarterly dividend of $0.1325 per share, or $0.045 monthly
  • Based on a share price of $24.33, this gives them a dividend yield of 2.18%

Stock Performance

Over the last 5 years, this stock has gone from around $10 per share to $23 per share. That is an overall return of around 111%.

However, much of the gain has been in the last year, whereas the stock is up over 61%. This is likely due to the renewed interest in farmland investing. Billionaires like Bill Gates buying farmland have made it a more trendy investment.

Late in 2021 and in early 2022, the stock actually reached a high of $40.36 for a 248% return over the past 5 years. Although, in the past couple of months, the stock has returned to a price of around $24 due to concerns with inflation and general market uncertainty.

Revenue And Gross Profit

Both total revenue and gross profit have been on the rise over the last few years.

Total Revenue

  • 2018: $36,687,000
  • 2019: $40,692,000
  • 2020: $57,031,000
  • 2021: $75,318,000
  • TTM: $79,227,000

Gross Profit

  • 2018: $34,644,000
  • 2019: $38,219,000
  • 2020: $55,183,000
  • 2021: $72,782,000
  • TTM: $76,417,000

Is Gladstone Land Corp (LAND) A Buy?

With profits and revenue on the rise in addition to the increased dividend recently, Gladstone Land Corp appears to be on the “up and up.” It appears that they are making great decisions when it comes to purchasing new farms and helping the farmers to be successful.

Keep in mind, however, that the recent run up in the share price could have a lot to do with “hype.” If people suddenly lose interest in farmland as an asset class, the share price could decline in the short run.

While REITs are the easiest way to gain exposure to farmland, they are not the only way. Check out our article on the best farmland investing platforms for more options.

Before you ever make an investment decision, it is important to research your decision.

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