H & R Real Estate Trust

Sound bite for Twitter and StockTwits is: Considered a Core REIT. Nothing much is happening lately for this REIT although it has done as well as some others recently. See my spreadsheet at hr.htm.

I do not own this stock of H & R Real Estate Trust (TSX-HR.UN, OTC- HRUFF). Before I started blogging, I was following a number of REITs and this is one I had followed. It also used to be on a dividend list I followed.

If you look at growth in distributions, it is 13.4% and 0.82% per year over the past 5 and 10 years. The thing is that 6 years ago this company reduced distributions by 50%. Before the reduction, distributions were at $1.44 per share per year. Today they have not quite got back to that amount and are at $1.35 per share per year. They have done well in increasing the dividends over the past 5 years.

In 2008, this REIT announced it will reduce its monthly cash distributions to unitholders by half to $0.06 per unit commencing with the January 2009 distribution. The cash flow retained from the reduced distribution will be used to finance construction of The Bow, an H&R's development project in Calgary.

There have been good increases since 2009 until last year when there was no dividend increase. The last increase was 2013 and the increase was an 8% increase. Most analysts expect small increases in 2015 and 2016.

The Payout Ratios for Funds from Operations (FFO) is at 72% for 2014 and the 5 year median is at 68%. The Payout Ratios for Adjusted Funds from Operations (AFFO) is at 88% for 2014 and the 5 year median is at 86%. The Payout Ratios are fine.

The outstanding shares have increased by 13.8% and 11.1% per year over the past 5 and 10 years. This means that for a shareholder, per share values are important. Revenues have grown well, but Revenue per Share growth is very low. Cash Flow's growth is moderate to good. FFO growth is moderate to low and AFFO growth is very low.

Revenue has grown at 15% and 11.6% per year over the past 5 and 10 years. Revenue per Share growth is at 1% and 0.5% per year over the past 5 and 10 years. Cash Flow has grown at 22.7% and 17.6% per year over the past 5 and 10 years. CFPS growth is at 7.8% and 5.9% per year over the past 5 and 10 years.

FFO has grown at 4.3% and 2.7% per year over the past 5 and 10 years. AFFO has grown at 0.4% and 0.4% per year over the past 5 and 10 years. The AFFO growth is especially low. Analysts seem to expect that FFO growth will be down a bit this year, but AFFO will increase nicely.

Shareholders have done ok with 5 and 10 year total returns at 8.79% and 6.14% per year. The portion of this return attributable to capital gains is at 2.81% and 0.64% per year. The portion of this return attributable to dividends is at.5.98% and 5.50% per year. Others that I have reviewed lately have done better in return to shareholders over the past 5 and 10 years.

Debt Ratios are fine with the Debt Ratio at 1.95 and Leverage and Debt/Equity Ratios at 2.05 and 1.05. Leverage and Debt/Equity Ratios have improved as the 5 year median ratios are 3.19 and 2.19,

This is the first of two parts. The second part will be posted on Wednesday, March 18, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

H&R Real Estate Investment trust is an open-ended real estate investment trust. They have a portfolio of office properties, single-tenant industrial properties, retail properties and development projects. They operate across Canada and US. Its web site is here H&R.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

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