Why Easterly Government Properties Stock Is Down Today

Government real estate owner Easterly Government Properties (NYSE: DEA) reported quarterly results that were roughly in line with expectations, but investors are still more focused on disappointing news the company released earlier in the month.

Shares of Easterly traded down 3% as of 2 p.m. ET on Tuesday.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Resetting expectations

As its name implies, Easterly is a real estate investment trust (REIT) that is focused on government properties. The company has been in the spotlight of late due to the efforts of the Department of Government Efficiency (DOGE) to cut federal spending, including real estate.

Earlier this month, the REIT said it was reducing its quarterly dividend by 32% and implementing a 1-for-2.5 reverse stock split. CEO Darrell Crate said the move would align the company's dividend payout ratio with industry peers, but some investors had been attracted to Easterly thanks to its relatively high dividend yield. Shares lost 15% of their value on the announcement.

On Tuesday, the company reported first-quarter funds from operations (FFO) of $0.73 per share on revenue of $78.7 million. The FFO number, which is a REIT equivalent for earnings, matched expectations, while revenue missed by $1.3 million.

Is Easterly a buy?

Easterly is in the investor penalty box following the early April announcement, but the latest results at least provide for some hope that the company remains on track. Crate continues to believe it can be a net beneficiary from DOGE, saying, "We have observed the U.S. government to be more receptive to cost saving efforts than in the past" and said Washington could be interested in partnering with private real estate owners instead of relying on government-owned buildings.

The potential is there, but after a tumultuous April, Easterly has become a "show me" stock. Investors without a significant appetite for risk might want to limit this one to the watch list for now.

Should you invest $1,000 in Easterly Government Properties right now?

Before you buy stock in Easterly Government Properties, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Easterly Government Properties wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $598,818!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $666,416!*

Now, it’s worth noting Stock Advisor’s total average return is 872% — a market-crushing outperformance compared to 160% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 28, 2025

Lou Whiteman has positions in Easterly Government Properties. The Motley Fool recommends Easterly Government Properties. The Motley Fool has a disclosure policy.