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Easterly Government Properties (DEA)
NYSE:DEA
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Easterly Government Properties
(NYSE:DEA)
63Neutral
Positive Factors
Financial Flexibility
Increased financial flexibility with the extension of maturity to January 2028 and increased borrowing capacity to $250mm.
Investment Strategy
The company's investment thesis on mission-critical assets plays out, while DEA now has retained cashflow to invest in GSA and government-adjacent assets.
Negative Factors
Dividend Reduction
DEA reduced its dividend by 32% and executed a 1-for-2.5 reverse stock.
Leverage Concerns
Net debt/EBITDA remains elevated and is likely to continue to rise with announced investment activity.
Tenant Uncertainty
There is uncertainty surrounding the impacts of potential cuts suggested by Elon Musk and Vivek Ramaswamy, which could affect DEA's largest tenant, the Department of Veteran Affairs, and other federal agencies.
Easterly Government Properties (DEA) vs. S&P 500 (SPY)
Market Cap
$975.34M
Dividend Yield12.2%
Average Volume (3M)816.75K
Price to Earnings (P/E)51.0
Beta (1Y)0.55
Revenue Growth6.06%
EPS Growth-15.10%
CountryUS
Employees50
SectorReal Estate
Sector Strength66
IndustryREIT - Office
Share Statistics
EPS (TTM)0.07
Shares Outstanding44,905,160
10 Day Avg. Volume650,473
30 Day Avg. Volume816,747
Financial Highlights & Ratios
PEG Ratio-5.88
Price to Book (P/B)0.69
Price to Sales (P/S)0.00
P/FCF Ratio5.84
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$18.00Price Target Upside-17.13% Downside
Rating ConsensusHold
Number of Analyst Covering5
Easterly Government Properties Business Overview & Revenue Model
Company DescriptionEasterly Government Properties, Inc. is a real estate investment trust (REIT) that focuses on the acquisition, development, and management of Class A commercial properties that are leased to U.S. Government agencies. The company's portfolio primarily consists of high-quality assets that serve as mission-critical facilities for federal agencies, ensuring stable occupancy and long-term leases. With a strategic emphasis on properties leased to the federal government, Easterly Government Properties offers investors a unique opportunity to invest in a steady income-generating real estate sector.
How the Company Makes MoneyEasterly Government Properties makes money primarily through leasing its portfolio of properties to U.S. Government agencies on long-term leases, which provide a stable and predictable rental income. The company's revenue model is driven by rental payments from these government leases, which often include built-in rent escalations, ensuring growth in revenue over time. Additionally, the company may engage in strategic acquisitions and developments of new properties to expand its portfolio and increase its rental income. Key revenue streams include base rent, expense reimbursements, and potential gains from property sales. The company's focus on federal government tenants reduces credit risk and enhances the stability of cash flows.
Easterly Government Properties Financial Statement Overview
Summary
Easterly Government Properties shows strong operational performance with consistent revenue growth, a robust gross profit margin, and effective cash flow generation. However, high financing costs affect net profitability, and the moderate leverage level requires monitoring.Income Statement
Easterly Government Properties has shown consistent revenue growth, with a TTM revenue increase from the previous year. The gross profit margin remains strong at approximately 58.8% for the TTM, indicating efficient cost management. However, the net profit margin is lower due to high financing costs, affecting the overall profitability.78
Positive
Balance Sheet
The company maintains a solid equity base with an equity ratio of 41.4% in the TTM, indicating a stable financial structure. However, the debt-to-equity ratio stands at 0.88, reflecting a moderate level of leverage, which could pose risks if interest rates rise.70
Positive
Cash Flow
Easterly Government Properties demonstrates strong cash flow generation with a TTM operating cash flow of $162.9 million, exceeding net income. The operating cash flow to net income ratio is robust, suggesting effective cash earnings conversion. However, free cash flow growth has been modest, indicating potential constraints in cash available after investments.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 306.31M | 302.05M | 287.23M | 293.61M | 274.86M | 245.08M | Gross Profit |
| 180.22M | 200.98M | 184.80M | 195.93M | 187.74M | 169.52M | EBIT |
| 79.07M | 78.67M | 66.39M | 76.26M | 73.22M | 55.09M | EBITDA |
| 199.25M | 179.34M | 158.79M | 181.19M | 163.85M | 148.89M | Net Income Common Stockholders |
| 17.91M | 20.58M | 18.20M | 31.47M | -8.85M | -23.52M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 8.46M | 19.35M | 9.38M | 7.58M | 11.13M | 8.46M | Total Assets |
| 3.22B | 3.22B | 2.88B | 2.83B | 2.83B | 2.46B | Total Debt |
| 1.60B | 1.60B | 1.29B | 1.25B | 1.21B | 978.26M | Net Debt |
| 1.59B | 1.58B | 1.29B | 1.24B | 1.20B | 969.79M | Total Liabilities |
| 1.83B | 1.84B | 1.47B | 1.42B | 1.38B | 1.16B | Stockholders Equity |
| 1.33B | 1.32B | 1.32B | 1.24B | 1.28B | 1.15B |
| Cash Flow | Free Cash Flow | ||||
| 162.93M | 162.63M | 114.48M | 196.03M | 481.39M | 145.20M | Operating Cash Flow |
| 162.93M | 162.63M | 114.48M | 125.94M | 118.34M | 145.20M | Investing Cash Flow |
| -429.98M | -409.64M | -127.01M | -69.10M | -363.04M | -290.18M | Financing Cash Flow |
| 228.44M | 252.88M | 17.19M | -59.71M | 250.17M | 144.10M |
Easterly Government Properties Technical Analysis
Negative
21.72
Price Trends
22.76
Negative
24.74
Negative
27.80
Negative
Market Momentum
-0.36
Negative
55.53
Neutral
85.08
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DEA, the sentiment is Negative. The current price of 21.72 is above the 20-day moving average (MA) of 20.34, below the 50-day MA of 22.76, and below the 200-day MA of 27.80, indicating a neutral trend. The MACD of -0.36 indicates Negative momentum. The RSI at 55.53 is Neutral, neither overbought nor oversold. The STOCH value of 85.08 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DEA.
Easterly Government Properties Risk Analysis
Easterly Government Properties disclosed 70 risk factors in its most recent earnings report. Easterly Government Properties reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Easterly Government Properties Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $2.31B | ― | -2.11% | 2.93% | 1.67% | 73.75% | |
63 Neutral | $975.34M | 51.01 | 1.32% | 12.20% | 6.06% | -15.10% | |
61 Neutral | $723.35M | ― | -18.11% | 13.89% | -2.22% | 1.51% | |
60 Neutral | $2.82B | 10.41 | 0.43% | 8531.49% | 6.00% | -17.35% | |
50 Neutral | $1.44B | ― | -8.54% | 4.24% | -12.34% | -36.05% | |
48 Neutral | $874.59M | ― | -3.79% | 7.25% | -6.23% | 18.07% |
* Real Estate Sector Average
Performance Comparison
DEA
Easterly Government Properties
21.72
-5.98
-21.59%
PDM
Piedmont Office
7.03
0.31
4.61%
BDN
Brandywine Realty
4.32
0.12
2.86%
PGRE
Paramount Group
4.78
0.19
4.14%
JBGS
JBG Smith Properties
16.56
2.67
19.22%
Easterly Government Properties Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: 6.16%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strategic shift with a focus on long-term growth and capital flexibility. While the dividend reduction might be seen negatively by some, the company’s strong portfolio additions, financial performance, and successful debt financing highlight its growth potential and strategic positioning in the market.Q1-2025 Updates
Positive Updates
New Strategic Capital Allocation Strategy
Easterly announced a reduction of its quarterly dividend and a two-for-five reverse stock split to create more flexibility for growth and to free up significant capital for accretive investments.
Strong Portfolio Additions
Easterly announced two accretive additions to its portfolio: a 40,000 square foot federal courthouse in Medford, Oregon, and a 290,000 square foot facility leased to the AA+ rated District of Columbia government.
Solid Financial Performance
Net income per share was $0.07, core FFO per share was $0.73, and cash available for distribution was $31.1 million. Easterly is on track to deliver an estimated 2% to 3% core FFO per share growth in 2025.
Successful Debt Financing
Easterly raised an additional $125 million in debt capacity and increased borrowing capacity, which positions the company well for future growth.
Negative Updates
Dividend Reduction
The company reduced its quarterly dividend as part of its strategic capital allocation changes, which may be seen negatively by some investors focused on dividend yields.
Market Uncertainties
Despite no lease terminations from the Doge initiative, there remains a level of market uncertainty and potential risks associated with real estate strategies for government facilities.
Company Guidance
During the first quarter of 2025, Easterly Government Properties implemented strategic changes to enhance growth opportunities, including a two-for-five reverse stock split and a reduction in the quarterly dividend. These actions aim to align the dividend philosophy with peers, accelerate growth initiatives, and strengthen the balance sheet. Key metrics reported include a net income per share of $0.07 and core funds from operations (FFO) per share of $0.73. The company anticipates a 2% to 3% core FFO per share growth for 2025, supported by the acquisition of a 290,000 square foot facility in DC, 98% leased to the AA+ rated DC government, and a 40,000 square foot federal courthouse development in Medford, Oregon. Easterly Government Properties reported a cash available for distribution of $31.1 million and raised the bottom end of its full-year core FFO per share guidance to a range of $2.98 to $3.03, reflecting continued strong performance and strategic capital allocation.Easterly Government Properties Corporate Events
Stock SplitBusiness Operations and StrategyRegulatory Filings and Compliance
Easterly Government Properties Reduces Authorized Shares
Neutral
May 8, 2025
On May 8, 2025, Easterly Government Properties, Inc. filed an amendment to reduce its authorized common stock shares from 200 million to 80 million, following a one-for-two and a half reverse stock split on April 28, 2025. This strategic move is likely to impact the company’s stock structure and could influence its market positioning and shareholder value.
Spark’s Take on DEA Stock
According to Spark, TipRanks’ AI Analyst, DEA is a Neutral.
Easterly Government Properties demonstrates strong financial performance and strategic growth initiatives, bolstered by effective cash flow and successful debt financing. However, technical indicators point to bearish trends, and the high P/E ratio suggests potential overvaluation. The dividend reduction may concern income-focused investors, while the company’s strategic positioning and portfolio additions support future growth.
To see Spark’s full report on DEA stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.