Covered — short leases, slow raises. A quarterly payer since January 2026 — the board shifted from monthly to quarterly and raised the annual rate from $1.49 to $1.55 a share. Coverage is real on the cash line: the $0.775 declared for the first half of 2026 took 59.6% of Core FFO per diluted share ($1.30) and about 71.5% of Cash Available for Distribution per share, the AFFO-equivalent STAG reports after capital and leasing costs. The watch items are the lease clock and the raise record: a 4.5-year weighted-average lease term, total occupancy down to 94.5% at June 30, 2026, and annual raises of about 0.7% in both 2024 and 2025 before the 2026 step-up. For a REIT, the House reads AFFO payout — never the EPS payout, which depreciation makes meaningless.
Key risk: Anything that turns the 2026 expiration wave into lasting vacancy — total occupancy was 94.5% at June 30, 2026, and with a 4.5-year average lease term, space rolls and can sit empty far more often than at long-lease peers, so a rent loss reaches the cash that covers the dividend faster.
Changes if: The CAD payout pushes well past ~72%, leverage rises past 5.2×, or occupancy falls further instead of recovering — or the average lease term shortens again. The cushion and the occupancy recovery are the verdict.
- ✓AFFO coverage check: 71.5% of Cash Available for Distribution per share paid out in H1 2026 — $0.775 declared against $211.1 million of CAD and $1.30 of Core FFO per diluted share — leaves a real cushion for a REIT. STAG reports CAD, not AFFO; CAD is the same cash line after capital expenditures and leasing costs.
- !Yield check: 4.25% is earned, not stretched — 606 buildings in 41 states, the top ten tenants are only 9.9% of annualized base rent and the largest (Amazon) is 2.7% — but the leases behind it are short at a 4.5-year weighted-average term, and total occupancy fell to 94.5% (95.5% operating) at June 30, 2026.
- !Leverage check: 5.2× net debt to annualized run-rate adjusted EBITDAre is investment grade — BBB from Fitch and Baa2 from Moody's, with $613.7 million of liquidity at June 30, 2026 — but not light: refinancing maturing debt at current rates costs more than the 4.42% weighted-average rate on the existing stack.
What this grade doesn't say: It screens the dividend only — covered, real, compounding. It says nothing about valuation or price: a well-covered payer can still be overpriced, and its price can still fall.