With macroeconomic concerns weighing on the markets, high-yield dividend stocks could be a solid addition to your portfolio to earn steady income amid the volatility. Moreover, when high-yield stocks are backed by analyst confidence, they become even more compelling investment options.
In this context, CTO Realty (CTO) stands out as an attractive choice. The company offers a substantial dividend yield of over 8%. Moreover, it has a “Strong Buy” consensus rating from analysts, which suggests that Wall Street has confidence in its fundamentals and growth prospects.
A Strong Real Estate Portfolio Driving Growth
CTO Realty is a real estate investment trust (or REIT) focusing on high-quality, retail properties in the fastest-growing U.S. markets. In addition to owning and managing these properties, CTO also has a significant stake in Alpine Income Property Trust (PINE). This diversification helps CTO Realty maintain stable revenue streams, supporting its dividend payouts.
CTO Realty has positioned itself for success by targeting high-growth regions with strong yields. Further, with a leased occupancy rate of 93.4%, CTO maintains a strong cash flow, reinforcing its ability to sustain and even grow dividends.
CTO has consistently paid dividends since 1976, reflecting its long-standing commitment to shareholder returns. Moreover, it has increased its dividend at various points, making it a reliable income-generating stock.
Financial Strength and Expansion in 2024
CTO Realty ended 2024 on a high note, reporting a record-high core funds from operations (FFO) of $1.88 per share, a 6% increase from the previous year. This growth was driven by strong investment activity and high leasing demand, which exceeded management’s expectations.
Throughout 2024, CTO made $331 million in investments at an impressive weighted average yield of 9.3%. One notable acquisition was Granada Plaza, a $17 million investment that expanded CTO's presence in the Tampa Metro Area. This 74,000-square-foot shopping center, anchored by a top-performing Publix, is positioned in a rapidly growing retail market, further strengthening the REIT's portfolio.
Thanks to these strategic acquisitions, CTO’s total property holdings grew by more than 1 million square feet in 2024, a 26% expansion, bringing its total portfolio to 4.7 million square feet. CTO also significantly reduced its leverage and closed the year with over $200 million in liquidity, reinforcing its financial stability.
Robust Leasing Performance and Future Growth
Leasing activity was another bright spot for CTO in 2024. During the fourth quarter alone, the company secured 68,000 square feet in new leases, renewals, and extensions. For the full year, leasing activity surpassed 450,000 square feet at an average rent of $24.07 per square foot. Comparable leases signed in 2024 totaled 352,000 square feet, achieving a positive cash lease spread of 23% —reflecting strong tenant demand.
Additionally, CTO has been reclaiming spaces vacated due to retailer bankruptcies. Encouragingly, CTO has already secured letters of intent (LOIs) or is in lease negotiations for most of these spaces, highlighting the demand for its properties. With lease renewals and releasing efforts in progress, CTO expects rental income from new tenants to commence in 2026. The company estimates potential releasing spreads of 40% to 60%, suggesting significant upside potential in rental income.
Additional Growth Catalysts in the Pipeline
Beyond leasing, CTO is exploring further expansion opportunities. Negotiations are underway with several anchor tenants for a 10-acre unbuilt land parcel adjacent to The Collection at Forsyth shopping center. This development is expected to contribute to earnings by late 2026.
Together, the signed-not-open leasing pipeline, releasing initiatives, and upcoming developments should provide strong tailwinds for CTO’s earnings growth in future years. The company also has a robust acquisition pipeline and anticipates closing one or two additional acquisitions in the near term, further enhancing its portfolio and cash flow potential.
Analyst Confidence in CTO Stock
Analysts remain bullish on CTO Realty, as reflected by a “Strong Buy” consensus rating.
This overall positive sentiment reflects the company’s strong fundamentals, income-generating potential, and sustainable yield of 8.11%.
