W. P. Carey Inc. is scored 32 for moat and 33 for management. The management score rests on a return on invested capital of 24.8% and a gross margin of 28.6% — figures that describe capital earning less than it costs to employ. Debt sits at 1.07x equity.
The price anchors are built on deliberately conservative assumptions. Growth is modelled at 8.0% a year, the rate measured from the filings. The exit multiple assumed is 15.9x. That produces an intrinsic value of $24.76, a 10-CAP price of $49.44 and a payback time price of $56.68, with the value zone set at the highest of the three, $56.68. Today's price of $63.83 sits 13% above it.
The price is above the value zone and the business scores 32 for moat and 33 for management. Neither test argues for paying up here.
| Price | $63.83 |
| Market cap | $14.5B |
| P/E ratio | 21.8x |
| Return on invested capital | 24.8% |
| Gross margin | 28.6% |
| Debt to equity | 1.07x |
| Free cash flow yield | 7.7% |
| Growth rate used | 8.0% |
| Growth rate measured | 8.0% |
| Exit multiple assumed | 15.9x |
| Company | Moat | Buy price |
| Jones Lang LaSalle (JLL) | 81 | $333.15 |
| Kimco Realty (KIM) | 44 | $22.40 |
| Host Hotels & Resorts (HST) | 39 | $27.07 |
| Mid-America Apartment Communities (MAA) | 25 | $62.40 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of W. P. Carey Inc. rather than accepting ours.