Sound bite for Twitter and StockTwits is: Dividend Growth Real Estate. Results of stock price testing is that the stock price is probably reasonable but could be cheap. Debt Ratios are fine. The Dividend Payout Ratios (DPR) are high, but the AFFO and FFO DPRs are fine. The current dividend yield is high with dividend growth low. See my spreadsheet on SmartCentres REIT.
Is it a good company at a reasonable price? I bought this stock for diversification purposes. It does fulfill the reason I bought it. It pays a good dividend and it does increase the dividend, all be it on at a low rate. I would prefer that the total return be closer to 8% per year, but I do think that, in time, it will get to this total return. The stock price is mostly testing as reasonable, but the 10 year median dividend test does say the stock is cheap.
I own this stock of SmartCentres REIT (TSX-SRU.UN, OTC-CWYUF). Once you have 5 or 6 stocks, you might want to consider a REIT for diversification. REITs are an easy way to investment in real estate. I am therefore following a few REIT stocks and in 2009 I decided to look at a few on the Dividend Achiever's List. It is not always on this list because of periods of flat dividends.
When I was updating my spreadsheet, I noticed that there is insider buying by the CFO and the Chairman and CEO. Mitchell Goldhar holds both positions of Chairman and CEO. I have made a total return over the past 4 years of 6.58% with 7.83% from dividends and a capital loss of 1.25%.
The current dividend yield is high with dividend growth low. The current dividend yield is high (7% and above) at 7.09%. The 5 year median dividend yield is also high at 7.40%. The 10 year and historical median dividend yields are good (5% to 6% ranges) at 5.87% and 6.05%. Dividend increases are low (below 8% per year) at 1.02% per year over the past 5 years. The last dividend increase was in 2020 and it was for 2.8%. This stock has raised their dividends 12 times over the past 21 years.
The Dividend Payout Ratios (DPR) are high, but the AFFO and FFO DPRs are fine. The DPR for 2023 for Earnings per Share (EPS) is high at 81% with 5 year coverage at 75%. The DPR for 2023 for Adjusted Funds from Operations (AFFO) is too high at 101% with 5 year coverage better at 92%. The DPR for 2023 for Funds from Operations (FFO) is high at 82% with 5 year coverage at 85%. However, DPRs for AFFO and FFO are considered fine at 95% to lower. The DPR for 2023 for Cash Flow per Share (CFPS) is high at 65% with 5 year coverage at 67%. The DPR for 2023 for Free Cash Flow (FCF) is high at 81% with 5 year coverage at 73%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 80.53% | 75.41% |
| AFFO | 101.10% | 91.84% |
| FFO | 82.22% | 85.06% |
| CFPS | 65.59% | 66.64% |
| FCF | 81.34% | 73.26% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2023 is high at 1.04 and currently better at 0.96. However, we need also to look at the Long Term Debt/Covering Assets Ratio for 2023 which is good at 0.41 and currently at 0.39 because this is an important one for a REIT. The Liquidity Ratio for 2023 is very low at 0.35 and 0.17 currently. If you added in Cash Flow after dividends and add back the current debt, the ratios are fine at 1.54 and currently at 1.12. This is not an important ratio for REITs. The Debt Ratio for 2023 is good at 2.11 and 2.12 currently. For REITs this is a more important ratio than Liquidity. The Leverage and Debt/Equity Ratios for 2023 are good at 1.90 and 0.90 and currently at 1.89 and 0.89.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 1.04 | 0.96 |
| Lg Term A | 0.41 | 0.39 |
| Intang/GW | 0.01 | 0.01 |
| Liquidity | 0.35 | 0.17 |
| Liq. + CF | 0.37 | 0.18 |
| Liq CF DT | 1.45 | 1.12 |
| Debt Ratio | 2.11 | 2.12 |
| Leverage | 1.90 | 1.89 |
| D/E Ratio | 0.90 | 0.89 |
The Total Return per year is shown below for years of 5 to 26 to the end of 2023. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2018 | 5 | 1.02% | 2.29% | -4.19% | 6.48% |
| 2013 | 10 | 1.80% | 6.80% | -0.11% | 6.91% |
| 2008 | 15 | 1.20% | 16.43% | 5.37% | 11.06% |
| 2003 | 20 | 2.40% | 12.16% | 3.01% | 9.15% |
| 1998 | 25 | 13.18% | 4.90% | 8.28% | |
| 1997 | 26 | 26.72% | 10.91% | 15.81% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 9.26, 10.88 and 12.49. The corresponding 10 year ratios are 12.72, 13.80 and 15.05. The corresponding historical ratios are 12.99, 16.02 and 18.45. The current P/E Ratio is 19.61 based on a stock price of $26.08 and EPS estimate for 2024 of $1.33. This ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. However, for REITs the testing for FFO and AFFO are more important.
Adjusted Funds from Operations (AFFO) data. The 5-year low, median, and high median Price/ Adjusted Funds from Operations Ratios are 11.63, 13.66 and 15.70. The corresponding 10 year ratios are 13.18, 14.61 and 15.98. The current P/AFFO Ratio is 14.10 based on AFFO estimate for 2024 of $1.85 and a stock price of $26.08. The current ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
Funds from Operations (FFO) data. The 5-year low, median, and high median Price/ Funds from Operations Ratios are 9.46, 11.11 and 15.15. The corresponding 10 year ratios are 12.43, 13.60 and 15.24. The current P/FFO Ratio is 12.85 based on FFO estimate for 2024 of $2.03 and a stock price of $26.08. The current ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $30.35. The 10-year low, median, and high median Price/Graham Price Ratios are 0.79, 0.87 and 0.94. The current P/GP Ratio is 0.86 based on a stock price of $26.08. The current ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10-year median Price/Book Value per Share Ratio of 1.12. The current P/B Ratio is 0.85 based on a Book Value of $5,243, Book Value per Share of $30.79 and a stock price of $26.08. The current ratio is 25% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a 10-year median Price/Cash Flow per Share Ratio of 13.91. The current ratio is 13.28 based on Cash Flow for the last 12 months of $331.3M, Cash Flow per Share of $1.96 and a stock price of $26.08. The current ratio is 4% below the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get an historical median dividend yield of 6.05%. The current dividend yield is 7.09% based on dividends of $1.85 and a stock price of $26.08. The current dividend yield is 17% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median dividend yield of 5.87%. The current dividend yield is 7.09% based on dividends of $1.85 and a stock price of $26.08. The current dividend yield is 20.9% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10-year median Price/Sales (Revenue) Ratio is 6.10. The current P/S Ratio is 4.93 based on Revenue estimate for 2024 of $900, revenue per share of 5.29 and a stock price of $26.08. The current ratio is 19% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
Results of stock price testing is that the stock price is probably reasonable but could be cheap. The 10 year median dividend yield testing says that the stock price is cheap, so the stock price could be cheap. The P/S Ratio testing says that the stock price is reasonable. Most of the rest of the testing is showing the stock price as reasonable except for the P/B Ratio testing that is showing the stock price as cheap.
When I look at analysts’ recommendations, I find Strong Buy (1), Buy (1), Hold (5), and Underperform (1). The consensus would be a Hold. The 12 month stock price consensus is $25.00 with a high of $28.00 and low of $23.50. The consensus stock price of $25.00 implies a total return of 2.95% with a capital loss of 4.14% and dividends of 7.09% based on a current stock price of $26.08.
The only entry on Stock Chase for 2023 says Do Not Buy. It is not growing as well as other REITs, but you could buy for its secure high dividend. Stock Chase gives this stock 3 stars out of 5. Amy Legate-Wolfe on Motley Fool reviews this stocks and talks about the pros and cons of investing in it. Sneha Nahata on Motley Fool says invest in this stock for passive income. The company put out a press release via Newswire about their fourth quarter of 2023. The company put out a press release via Newswire about their second quarter of 2024 results.
Simply Wall Street gives this stock 2 and one half stars out of 5. Simply Wall Street gives one warning of debt is not well covered by operating cash flow. They have no stock review. The web site tipranks says what bulls and bears are saying about this stock. A site c alled Markdale Financial Managment compares this company to Allied properties.
SmartCentres Real Estate Investment Trust is a Canadian fully integrated commercial and residential REIT. The company is developing complete, connected, mixed-use communities on its existing retail properties, under its wholly-owned residential sub-brand, SmartLiving. The Trust develops, leases, constructs, owns and manages shopping centres, office buildings, high-rise and low-rise condominiums and rental residences, seniors' housing, townhome units, self-storage rental facilities, and industrial facilities in Canada. Its web site is here SmartCentres REIT.
The last stock I wrote about was about was High Liner Foods (TSX-HLF, OTC-HLNFF) ... learn more. The next stock I will write about will be Cargojet Inc (TSX-CJT, OTC-CGJTF) ... learn more on Friday, September, 6, 2024 around 5 pm. Tomorrow on my other blog I will write about Something to Buy September 2024.... learn more on Thursday, September 5, 2024 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. 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.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
Also, on my book blog I have put a review of the book The Mending by Lynne Golding learn more...
No comments:
Post a Comment