IPO of the Week: Store Capital

Josef Schuster
Dr. Josef Schuster is the founder of Chicago-based IPOX Schuster LLC and chief architect of the IPOX® Indexes. The IPOX methodology is implemented in an IPO and spin-off strategy at Catalyst Funds. Before founding IPOX, Dr. Schuster pursued his academic work on European IPOs in the Financial Markets Group (FMG) at the London School of Economics (LSE), where he completed his MSc and PhD and conceived the idea to start IPOX. He regularly appears in the media as an expert in global New Listings and respective investment products.

Company Description

Founded in 2011, STORE Capital  is an internally managed net-lease real estate investment fund (or REIT) in the acquisition, investment and management of Single Tenant Operation Real Estate (or STORE Properties). STORE Capital has an investment portfolio across the United States in sectors including service, retail and industrials. STORE was indirectly controlled by Oaktree Capital Management L.P. prior to its exit in 2016.

Business Model

STORE Capital generates both rental revenues and interest income.

IPO History

On 11/18/2014, STORE Capital launched the REIT offering on NYSE led by Goldman Sachs, Credit Suisse and J.P. Morgan. The share was priced at $18.50 per share, little above the middle of its expected range of $17 to $19 per share. With a full subscription of 27.5 million shares offered, and an additional 15% over-allotment option fully exercised, STORE Capital was valued at approximately $2.05 billion at offer. The stock opened at $19.65/share and finished the first day at $19.5. STORE Capital was included in the IPOX® 100 U.S. Portfolio on 06/15/2018 and currently weighs approximately 0.5% of the portfolio.

Historical Performance

Growth Outlook

Industry Comparison

Company

Stock

Symbol

IPO/Spin-off

Date

Initial
Return

Offer to Date

2019

YTD

Beta to S&P

EPS

2018

Revenue

(in million)

 Cash Dividend per share

FFO (in million)

Store Capital

STOR US

11/18/2014

5.41%

147.84%

33.9%

0.46

$1.06

540.76

1.28

357.63

Realty Income

O US

Reality Income went public in 1994

23.3%

0.66

$1.26

1,327.84

2.631

903.26

VEREIT

VER US

09/07/2011

1.99%

49.3%

42.6%

0.45

-$0.16

1,257.87

0.55

438.07

Agree Realty Corporation

ADC US

Agree Realty went public in 1994

25.4%

0.68

$1.80

148.19

2.155

93.43