Is Gladstone Land a good stock to buy

Is Gladstone Land Corp (LAND) A Good Investment In 2024?

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There are many ways to invest – stocks and bonds are the most common investment held by investors. While less common, Farmland is becoming increasingly more popular.

With consistent returns, more and more investors are seeking ways to add it to their portfolio. But that is easier said than done as purchasing a farm outright can be a significant capital expense.

However, there are a few other more accessible ways to invest in farmland. The publicly traded REIT Gladstone Partners Corp (LAND) is one of these ways.

As a farmland REIT, it trades on the same exchanges as stocks giving you a high level of liquidity. It is perhaps the easiest way  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 as the stock market. 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!

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Farmland has provided investors with consistent returns for decades, but gaining exposure to this alternative asset has been a challenge in the past.

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What Is Gladstone Land Corp (LAND)?

Gladstone Land Corp owns farmland and farm related facilities across 15 different US states. Currently, the trust owns 169 different farms totaling over 116,000 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. As of February 2023, the weighted-average remaining lease term for their tenants was 6.2 years.

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 75 professionals collectively managing $4.0 Billion in assets.

You can learn more about Gladstone Land Corp with their detailed FAQ page.

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 $0.1369 per share, or $0.0456 monthly
  • Based on a share price of $16.40, this gives them a dividend yield of 3.34%

Stock Performance

Over the last 5 years, this stock has gone from around $13 per share to $16 per share. That is an overall return of around 30%.

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 $16 due to concerns with inflation and general market uncertainty.

A lot of the growth is likely due to the renewed interest in farmland investing. Billionaires like Bill Gates buying farmland have made it a more trendy investment.

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
  • 2022: $89,236,000

Gross Profit

  • 2018: $34,644,000
  • 2019: $38,219,000
  • 2020: $55,183,000
  • 2021: $72,782,000
  • 2022: $86,417,000

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 be successful.

With the share price coming down over the last few months in response to inflation and market uncertainty, it could be a good time to buy.

While REITs provide 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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Each parcel is divided into shares, and investors can purchase shares to earn cash distributions as well as benefit from the land value appreciation.

Farmland Riches is affiliated with AcreTrader, and we may earn a commission when you sign up for AcreTrader.

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