Supermarket Income REIT PLC (SUPR.L), a FTSE 250 constituent, stands out in the real estate sector by focusing solely on grocery property investments—an essential component of the national food infrastructure. Renowned for its strategic portfolio of omnichannel grocery stores, the company is engaged with top supermarket operators across the UK and Europe. As of 30 June 2025, the portfolio was valued at £1.6 billion, aiming to deliver secure, inflation-linked, and growing rental income.
For investors seeking income and growth, Supermarket Income REIT offers an intriguing opportunity with a current dividend yield of 7.36%. The company’s strategy of distributing a progressive dividend, despite a high payout ratio of 124.59%, underscores its commitment to delivering shareholder value. This high yield might appeal to income-focused investors, particularly in a low-interest-rate environment.
Trading at 85.3 GBp, SUPR.L is near its 52-week high of 86.80 GBp, exhibiting a modest price change of 0.02% recently. Technical indicators suggest a bullish trend with the stock’s 50-day and 200-day moving averages standing at 82.38 GBp and 80.80 GBp, respectively. A relative strength index (RSI) of 60.00 further supports this optimistic outlook, indicating neither overbought nor oversold conditions.
However, the valuation metrics present a complex picture. The forward P/E ratio is a staggering 1,350.11, suggesting that the market expects significant growth or is pricing in other factors, such as stability and income potential. But with no available data for trailing P/E, PEG, or price/book ratios, investors may find it challenging to benchmark the stock against its peers.
On the financial performance front, SUPR.L has reported a revenue growth of 4.20%, coupled with an EPS of 0.05 and a return on equity of 5.54%. Yet, the substantial negative free cash flow of -£84.4 million raises questions about its financial flexibility and ability to sustain such a high dividend payout ratio without tapping into reserves or external funding.
Analysts remain cautiously optimistic, with three buy ratings and three hold ratings, and none recommending a sell. The target price range between 80.00 and 95.00 GBp suggests a potential upside of 2.46%, with the average target price pegged at 87.40 GBp. This indicates a modest growth potential in the near term but highlights the stock’s appeal as a steady income generator.
For those considering an investment in Supermarket Income REIT, it is crucial to weigh the attractive dividend yield against the challenges posed by valuation and financial metrics. Investors should stay informed on the company’s ability to maintain its payout strategy and continue its growth trajectory in a competitive retail real estate landscape. As the only LSE-listed company focused on grocery property investments, SUPR.L provides a unique proposition for those looking to diversify their portfolio with a niche yet essential market segment.
