Stock Analysis & Valuation Alexander's, Inc. (ALX)

• Previous Close: $244.90
• Sector Valuation Confidence Level: Low

Valuation method	Value, $	Upside, %
Artificial intelligence (AI)	415.24	70
Intrinsic value (DCF)	95.65	-61
Graham-Dodd Method		n/a
Graham Formula	73.69	-70

Strategic Investment Analysis

Company Overview

Alexander's, Inc. (NYSE: ALX) is a specialized real estate investment trust (REIT) focused on high-value retail and office properties in the greater New York City metropolitan area. The company owns and manages seven strategically located properties, including flagship retail and office spaces in prime locations such as Manhattan. As a REIT, Alexander's generates revenue primarily through long-term leases with high-credit tenants, ensuring stable cash flows. The company operates in the competitive REIT - Retail sector, benefiting from New York City's robust commercial real estate demand. With a market capitalization exceeding $1 billion, Alexander's is a niche player with a concentrated but high-quality portfolio. Its properties, including the iconic Alexander's department store redevelopment, cater to premium tenants, reinforcing its position in the luxury and high-traffic retail segments. Investors value ALX for its strong dividend yield and exposure to NYC's resilient real estate market.

Investment Summary

Alexander's, Inc. presents an attractive investment opportunity for income-focused investors, offering a high dividend yield of $18 per share, supported by stable cash flows from premium NYC properties. The company's low beta (0.741) suggests lower volatility compared to the broader market, appealing to risk-averse investors. However, its concentrated portfolio in NYC exposes it to localized economic risks, including fluctuations in commercial real estate demand. The REIT's strong net income ($43.4M) and operating cash flow ($54.1M) indicate healthy financials, but its high total debt ($1.1B) relative to revenue ($226.4M) warrants caution. ALX is best suited for investors seeking steady dividends with moderate growth potential in a high-barrier-to-entry market.

Competitive Analysis

Alexander's, Inc. differentiates itself through its exclusive focus on high-value NYC properties, a strategy that minimizes geographic risk while maximizing tenant quality. Its competitive advantage lies in prime locations, long-term leases with creditworthy tenants, and a low portfolio turnover. Unlike diversified retail REITs, ALX's niche approach allows for deep market expertise and premium pricing power. However, its small scale (7 properties) limits diversification benefits compared to larger peers. The company's leverage ratio (debt-to-equity) is higher than some competitors, reflecting its aggressive asset concentration. Its lack of capital expenditures suggests a mature portfolio with limited near-term growth, relying instead on rental income stability. In the REIT - Retail sector, ALX competes by offering investors pure-play exposure to NYC's luxury retail and office space, but its success is tightly linked to the city's economic health.

Major Competitors

• Simon Property Group, Inc. (SPG): Simon Property Group is the largest retail REIT in the U.S., with a diversified portfolio of malls and outlets. Its scale and geographic diversity reduce risk compared to ALX's NYC concentration. However, SPG faces challenges from e-commerce, whereas ALX's premium urban properties are less susceptible. SPG's higher liquidity and lower leverage are strengths, but its growth prospects are more muted.
• Macerich Company (MAC): Macerich focuses on high-end retail properties but with broader U.S. exposure. Its larger portfolio provides diversification, but ALX's NYC-centric model offers higher rent per square foot. MAC has struggled with tenant bankruptcies, while ALX's luxury tenants are more resilient. MAC's recent dividend cuts contrast with ALX's stable payouts.
• Kimco Realty Corporation (KIM): Kimco owns open-air shopping centers, a different niche than ALX's urban properties. KIM's national footprint reduces location risk but lacks ALX's premium pricing power. Kimco's lower leverage and higher growth investments appeal to some investors, but ALX's NYC focus commands higher rent premiums.
• Federal Realty Investment Trust (FRT): Federal Realty specializes in mixed-use retail properties in affluent urban markets. Like ALX, it focuses on high-income areas but with more geographic diversity. FRT's lower yield (compared to ALX's 18/share) may deter income investors, but its development pipeline offers growth ALX lacks.