CTO
CTO
Accumulate 2026-05-05
Model
DDM
Price at Report
$20.33
Base IV
$22.69
Bear IV
$18.26
Bull IV
$25.12
Entry Zone: 16-20 · Sell Above: 25
Bore Family Office
Valuation Report — CTO Realty Growth (CTO) • May 5, 2026
3-Stage DDM (Ke) • Discount Rate: 8.94% • Current Price: $20.33
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
CTO Realty Growth is a publicly traded REIT that owns and operates a portfolio of high-quality open-air retail centers located primarily in fast-growing Southeast and Southwest US markets. The company focuses on grocery-anchored and necessity-based shopping centers along growth corridors, with top exposure in Florida, Georgia, North Carolina, and Texas. CTO also maintains a structured preferred equity investment portfolio yielding 11.6% weighted average, providing complementary high-yield income. The portfolio was 95.4% leased at Q1 2026 with a $6.2M signed-not-open pipeline representing 5.5% of in-place rent.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Shopping Centers | $144M | 96% | +20.1% | — | Open-air retail centers; 95.4% leased; SPNO +6.8% Q1 |
| Structured Investments | $6M | 4% | +55.0% | — | Preferred equity in Class A retail; 11.6% WA yield; $158M portfolio |
| Blended Growth Rate | — | 100% | +21.5% | — | Weighted avg across segments |
📊 Business Lifecycle Stage
Stage 1
Startup
Startup
Stage 2
Hyper Growth
Hyper Growth
Stage 3
Self Funding
Self Funding
Stage 4
Operating Leverage
Operating Leverage
Stage 5
Capital Return
Capital Return
Stage 6
Decline
Decline
Stage 3 — Growth / Expansion: Revenue growing rapidly, approaching breakeven. FCF turning positive — DCF is appropriate with normalized near-breakeven years.
Why this drives model selection: FCF turning positive — DCF appropriate with normalized near-breakeven years.
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 1.8% | <8% weak |
| FCF Margin | 43.0% | ≥10% strong |
| Debt / EBITDA | 6.4x | >5x elevated |
| Revenue Trend | Growing 3yr | 3-year directional trend |
| FCF Margin Trend | Expanding | Directional margin trajectory |
| Analyst Revisions | Upward revisions | Last 90 days consensus direction |
⚠️ Elevated value trap risk — verify thesis before acting
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $70 | $82 | $109 | $125 | $150 |
| Rev YoY Growth | — | +17.1% | +32.6% | +14.1% | +20.1% |
| Gross Margin | 68.1% | 72.2% | 72.3% | 73.3% | 74.6% |
| EBITDA ($M) | $19 | $47 | $63 | $74 | $93 |
| EBITDA Margin | 27.1% | 56.6% | 57.9% | 59.7% | 62.2% |
| Operating Income ($M) | $-2 | $18 | $27 | $18 | $33 |
| Operating Margin | -2.2% | 21.5% | 24.3% | 14.1% | 22.1% |
| Net Income ($M) | $28 | $-2 | $6 | $-2 | $3 |
| Net Margin | 39.3% | -2.0% | 5.1% | -1.6% | 1.7% |
| EPS (diluted) | $1.56 | $-0.09 | $0.03 | $-0.35 | $0.08 |
| Free Cash Flow ($M) | $28 | $56 | $46 | $60 | $65 |
| Annual DPS | $1.330 | $1.490 | $1.520 | $1.520 | $1.520 |
| Total Debt ($M) | $278 | $446 | $495 | $519 | $616 |
💹 Capital Return & Share Count Analysis
Net Share Change
+81.9% (2021→2025)
📈 Net dilution — issuances exceed buybacks
EPS Amplification
EPS grew -94.9% vs net income -90.7% over the period — -4.2pp of EPS growth diluted by share issuance.
| Year | Diluted Shares (M) | YoY Change | Buyback Spend ($M) | Buyback Yield |
|---|---|---|---|---|
| 2021 | 17.8M | — | $2 | 0.6% |
| 2022 | 22.9M | +28.7% | $3 | 0.6% |
| 2023 | 22.6M | -0.9% | $6 | 1.4% |
| 2024 | 25.4M | +12.2% | $1 | 0.1% |
| 2025 | 32.3M | +27.1% | $9 | 1.4% |
CTO has been a net issuer of shares. Diluted shares grew from 17.75M (2021) to 32.29M (2025), an 82% increase driven by ATM offerings and equity issuance to fund acquisitions. Q1 2026: 733,900 shares issued via ATM at $19.59 avg. No systematic buyback program exists; occasional repurchases are opportunistic and immaterial relative to share count growth. This is significant dilution — AFFO/share growth significantly trails total AFFO growth due to the rising share base.
📈 DDM Scenarios
$18
🔴 Bear
$23
📊 Base
$25
🚀 Bull
$20.33
Current Price
$23
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | Ke | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 0.0% | 0.5% | 1.0% | 8.94% | $18 | ▼10.2% |
| 📊 Base | 2.0% | 2.5% | 2.0% | 8.94% | $23 | ▲11.6% |
| 🚀 Bull | 3.0% | 3.0% | 2.5% | 8.94% | $25 | ▲23.6% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 0.0% | Stage 2: 0.5% | Terminal: 1.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $1.520 | $1.395 | $1.40 |
| Year 2 | Stage 1 | $1.520 | $1.281 | $2.68 |
| Year 3 | Stage 1 | $1.520 | $1.176 | $3.85 |
| Year 4 | Stage 1 | $1.520 | $1.079 | $4.93 |
| Year 5 | Stage 1 | $1.520 | $0.991 | $5.92 |
| Year 6 | Stage 2 | $1.528 | $0.914 | $6.84 |
| Year 7 | Stage 2 | $1.535 | $0.843 | $7.68 |
| Year 8 | Stage 2 | $1.543 | $0.778 | $8.46 |
| Year 9 | Stage 2 | $1.551 | $0.717 | $9.17 |
| Year 10 | Stage 2 | $1.558 | $0.662 | $9.84 |
| Terminal | — | TV=$19.82 | PV(TV)=$8.42 (46% of IV) | $18.26 |
| Intrinsic Value | — | — | PV(Divs) $9.84 + PV(TV) $8.42 | $18.26 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (8.94%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (1.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $19.82. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $8.42). Intrinsic value = PV of all dividends ($9.84) + PV of terminal value ($8.42) = $18.26 per share.
Base Scenario
Stage 1: 2.0% | Stage 2: 2.5% | Terminal: 2.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $1.550 | $1.423 | $1.42 |
| Year 2 | Stage 1 | $1.581 | $1.333 | $2.76 |
| Year 3 | Stage 1 | $1.613 | $1.248 | $4.00 |
| Year 4 | Stage 1 | $1.645 | $1.168 | $5.17 |
| Year 5 | Stage 1 | $1.678 | $1.094 | $6.27 |
| Year 6 | Stage 2 | $1.720 | $1.029 | $7.29 |
| Year 7 | Stage 2 | $1.763 | $0.968 | $8.26 |
| Year 8 | Stage 2 | $1.807 | $0.911 | $9.17 |
| Year 9 | Stage 2 | $1.852 | $0.857 | $10.03 |
| Year 10 | Stage 2 | $1.899 | $0.806 | $10.84 |
| Terminal | — | TV=$27.91 | PV(TV)=$11.85 (52% of IV) | $22.69 |
| Intrinsic Value | — | — | PV(Divs) $10.84 + PV(TV) $11.85 | $22.69 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (8.94%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $27.91. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $11.85). Intrinsic value = PV of all dividends ($10.84) + PV of terminal value ($11.85) = $22.69 per share.
Bull Scenario
Stage 1: 3.0% | Stage 2: 3.0% | Terminal: 2.5%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $1.566 | $1.437 | $1.44 |
| Year 2 | Stage 1 | $1.613 | $1.359 | $2.80 |
| Year 3 | Stage 1 | $1.661 | $1.285 | $4.08 |
| Year 4 | Stage 1 | $1.711 | $1.215 | $5.30 |
| Year 5 | Stage 1 | $1.762 | $1.148 | $6.44 |
| Year 6 | Stage 2 | $1.815 | $1.086 | $7.53 |
| Year 7 | Stage 2 | $1.869 | $1.027 | $8.56 |
| Year 8 | Stage 2 | $1.925 | $0.971 | $9.53 |
| Year 9 | Stage 2 | $1.983 | $0.918 | $10.44 |
| Year 10 | Stage 2 | $2.043 | $0.868 | $11.31 |
| Terminal | — | TV=$32.51 | PV(TV)=$13.81 (55% of IV) | $25.12 |
| Intrinsic Value | — | — | PV(Divs) $11.31 + PV(TV) $13.81 | $25.12 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (8.94%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $32.51. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $13.81). Intrinsic value = PV of all dividends ($11.31) + PV of terminal value ($13.81) = $25.12 per share.
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 6.9% | $30 | $32 | $35 | $38 | $42 |
| 7.4% | $28 | $29 | $31 | $33 | $36 |
| 7.9% | $25 | $27 | $28 | $30 | $32 |
| 8.4% | $24 | $25 | $26 | $27 | $29 |
| 8.9% | $22 | $23 | $24 | $25 | $26 |
| 9.4% | $21 | $21 | $22 | $23 | $24 |
| 9.9% | $19 | $20 | $21 | $21 | $22 |
| 10.4% | $18 | $19 | $19 | $20 | $21 |
| 10.9% | $17 | $18 | $18 | $19 | $19 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | Ticker | P/FFO | EV/EBITDA | Div Yield | Notes |
|---|---|---|---|---|---|
| InvenTrust | IVT | 12.5x | 13.2x | 3.7% | Grocery-anchored Sun Belt |
| Kite Realty | KRG | 12.0x | 12.8x | 3.9% | Open-air retail; mixed markets |
| BRT Realty | BRT | 9.5x | 11.5x | 5.8% | Multi-family + retail REIT |
| Urstadt Biddle | UBA-PD | 11.0x | 12.0x | 5.2% | Shopping centers NE |
| CTO 5yr Avg | CTO | 9.8x | 12.5x | 6.2% | Own historical average |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $1.520 |
| Current Yield | 7.47% |
| Consecutive Growth Years | 8 |
| 1-yr DPS CAGR | +0.0% |
| 3-yr DPS CAGR | +0.0% |
| 5-yr DPS CAGR | +3.3% |
| 10-yr DPS CAGR | +8.0% |
| Payout Ratio (DPS/EPS) | 68.6% |
| FCF Payout Ratio | 0.0% |
| Sustainability Verdict | Safe |
AFFO payout ratio of 68.6% provides comfortable coverage. DPS flat at $1.52 since Q2 2023 as management prioritizes AFFO coverage improvement and balance sheet repair over dividend growth. Resume likely once leverage trends below 6x and SNO pipeline fully converts to cash rent.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $-0.09 | — | — | — | Actual |
| 2023 | $0.03 | — | — | — | Actual |
| 2024 | $-0.35 | — | — | — | Actual |
| 2025 | $0.08 | — | — | — | Actual |
| 2026 | $0.08 | $0.14 | $0.23 | 4 | Estimate |
| 2027 | $0.14 | $0.14 | $0.15 | 3 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $0.1B | — | — | — | Actual |
| 2023 | $0.1B | — | — | — | Actual |
| 2024 | $0.1B | — | — | — | Actual |
| 2025 | $0.1B | — | — | — | Actual |
| 2026 | $0.2B | $0.2B | $0.2B | 4 | Estimate |
| 2027 | $0.1B | $0.2B | $0.2B | 3 | Estimate |
(c) Individual Analyst Price Targets
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Jay Kornreich | Cantor Fitzgerald | Buy | $23 | +13.1% |
| Jason Weaver | Jones Trading | Strong Buy | $23 | +13.1% |
💡 Investment Thesis
- Embedded growth from SNO pipeline: $6.2M of signed-not-open rent (5.5% of in-place) provides a multi-quarter earnings tailwind as tenants commence — no additional capital required.
- Outparcel development upside: Six outparcel opportunities at low double-digit unlevered yields on ~$30M investment, with full benefit expected by 2028. This is free optionality on land CTO already owns.
- Below-market rents = organic growth driver: 14% cash rent mark-to-market on Q1 renewals suggests significant re-leasing upside as leases roll, especially in high-growth Sun Belt markets.
- Structured investments provide yield cushion: $158M portfolio at 11.6% weighted average yield generates outsized returns with limited operational risk — effectively a high-yield credit portfolio inside a REIT structure.
- Leverage is the key risk: Net debt/EBITDA at 6.4x is elevated for a retail REIT. Refinancing risk and rate sensitivity are real headwinds. Madison Yards sale and ATM proceeds help, but de-levering will take time.
👔 Management Quality & Culture
CEO: Not identified · Tenure: Since 2011 (~15 yrs)
Net Insider Buys (12m)
+184,798 shares
Incentive Alignment
⚠️ Moderate
Compensation: Equity-based compensation present
CEO Background & Track Record
Board of Directors | CTO Realty Growth
Gable is a graduate of Tulane University with a B.A. in History. Prior to becoming CEO of Barron Collier Companies, he served in various leadership roles, including project manager during the establishment of the new hometo
Gable is a graduate of Tulane University with a B.A. in History. Prior to becoming CEO of Barron Collier Companies, he served in various leadership roles, including project manager during the establishment of the new hometo
CTO Realty Growth, Inc. (CTO) Leadership & Management Team A
CTO Realty Growth's CEO is John Albright, appointed in Aug 2011, has a tenure of 14.42 years. total yearly compensation is $3.05M, comprised of 21% salary and 79% bonuses, including company stock and options. directly
CTO Realty Growth's CEO is John Albright, appointed in Aug 2011, has a tenure of 14.42 years. total yearly compensation is $3.05M, comprised of 21% salary and 79% bonuses, including company stock and options. directly
Management Team | CTO Realty Growth
The Investor Relations website contains information about CTO Realty Growth's business for stockholders, potential investors, and financial analysts.
The Investor Relations website contains information about CTO Realty Growth's business for stockholders, potential investors, and financial analysts.
Capital Allocation & Strategy
Executive pay, equity plan and 2026 meeting on agenda for CT
We also strategically recycled capital, disposing of four properties at a weighted average exit cash cap rate of mid-5%. Finally, we completed over 670,000 square feet of leasing, meaningfully increasing our signed but not open leasing pipe
We also strategically recycled capital, disposing of four properties at a weighted average exit cash cap rate of mid-5%. Finally, we completed over 670,000 square feet of leasing, meaningfully increasing our signed but not open leasing pipe
CTO Realty Growth, Inc. (CTO) Leadership & Management Team A
Learn about CTO Realty Growth, Inc. (CTO) stock's management team. Comprehensive performance, salary and tenure analysis for the CEO, board and leadership team.
Learn about CTO Realty Growth, Inc. (CTO) stock's management team. Comprehensive performance, salary and tenure analysis for the CEO, board and leadership team.
Employee Ratings
Culture Signal
Mixed
Sources: Finnhub insider data · Brave Search (Glassdoor, Indeed, Comparably, news) · Earnings surprise data from analyst forecasts · Qualitative signals are directional only.
⚖️ DDM Verdict: Accumulate — CTO Realty Growth (CTO)
Current price: $20.33 | Analyst Avg PT: $22.67
$18
🔴 Bear
$23
📊 Base
$25
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$20 | Begin position |
| Tier 2 — Add | ≤$18 | Add on weakness |
| Tier 3 — Full | ≤$16 | Full allocation |
| Sell Alert | ≥$25 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
Verdict: Accumulate. At $20.33, CTO trades 10% below our base-case intrinsic value of $22.69 and offers a well-covered 7.5% dividend yield with 68.6% AFFO payout. The DDM (DPS-base) implies the market is pricing in near-zero DPS growth — but AFFO growth of ~12% gives substantial room for dividend increases once leverage normalizes. Key catalysts: SNO pipeline conversion, outparcel deliveries, and de-levering below 6x D/EBITDA. Accumulate on weakness below $20; add aggressively below $18 where yield exceeds 8.4%.
📂 Current Position Summary
| Metric | Value |
|---|---|
| Shares Held | 5,978.07 |
| Average Cost Basis | $18.70 |
| Current Market Value | $121,534 |
| Unrealized P&L | $+9,744 (+8.7%) |
| Annual DPS | $1.520/yr |
| Annual Dividend Income | $9,087/yr |
| Current Yield (at price) | 7.48% |
| Yield on Cost | 8.13% |
| vs Target (~$200K) | $121,534 / $200,000 (61%) |
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| Model Selection: DPS-Base DDM | DDM with DPS ($1.52) as base — not AFFO/share. While AFFO ($2.215) is the standard REIT distributable cash metric, CTO pays out only 68.6% of AFFO as dividends. Using AFFO as the DDM base would assume 100% payout, dramatically overstating value (AFFO-base DDM produced IV ≈ $51 vs consensus PT $22.67). The DDM discounts what is actually distributed. DPS growth rates are calibrated to reflect the AFFO growth trajectory — as AFFO grows and coverage improves, DPS can increase. |
| Discount Rate (Ke) | Ke = 8.94% = CAPM 7.94% + 1.0% leverage risk premium. CAPM: Rf=4.25%, β=0.67, ERP=5.5% → 7.94%. Added 100bp premium for elevated leverage (6.4x D/EBITDA vs peer median ~5.5x). Small-cap REITs with above-average leverage warrant a premium — pure CAPM beta understates refinancing and covenant risk. Implied Ke from dividend yield + growth: 7.5% + 1.5% ≈ 9.0%, consistent with our 8.94% estimate. |
| DPS Growth Calibration | DPS has been flat at $1.52 since Q2 2023 (8 consecutive quarters). AFFO grew ~12% over the same period, expanding coverage from ~60% to 68.6%. Base case: DPS resumes 2%/yr growth as leverage normalizes toward 5.5x and SNO pipeline converts to cash rent. This is conservative vs AFFO growth but realistic for a REIT prioritizing balance sheet repair. Bull case: 3% DPS growth if outparcels deliver early and management accelerates payout. Bear case: DPS stays flat near-term. |
| Sanity Check | Base IV ≈ $22.69 vs analyst consensus PT $22.67 → +0.1% divergence. ✅ All three scenarios produce reasonable IVs: Bear $18.26, Base $22.69, Bull $25.12. Current price $20.33 sits between Bear and Base, implying the market is pricing in moderate but not full DPS growth resumption. |
| Leverage Risk | Net debt/EBITDA at 6.4x is elevated for a retail REIT (peer median ~5.5x). CTO has been actively managing this: Madison Yards sale, ATM proceeds, and structured investment repayments. Guidance implies flat leverage in 2026. De-levering to sub-6x would be a catalyst for re-rating. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.