Is it a good company at a reasonable price? For a REIT, this stock has done rather well in increasing their distributions. What you should expect from REIT stock is about half from distributions and half from capital gains. Of course, this can vary over the years. It has done well since it changed its name in 2012. It still has a big connection to Magna. The stock seems to be at a current reasonable price.
I do not own this stock of Granite REIT (TSX-GRT.UN, NYSE-GRP.U). I first bought some of this stock in 2003 when it was called MI Developments (TSX-MIM.A). It was a company connected with Frank Stronach and Magna. TD bank also had an Action Buy Call (Strong Buy) on this stock. By the December 2006, it was doing well and my stock was up some 15% per year. I bought some more. The year of 2006 was the last time I did well on this stock. It kept going down and I sold it in 2009; being discourage it would ever do well again.
When I was updating my spreadsheet, I noticed that after the company changed its name in 2012, and it has done quite well since. As is typical of a REIT stock, a large portion of your total return is in distributions. There is always a tradeoff between growth of a stock and yield.
If you had invested in this company in December 2014, for $1,031.50 you would have bought 25 shares at $41.26 per share. In December 2024, after 10 years you would have received $738.38 in dividends. The stock would be worth $1,733.00. Your total return would have been $2,482.38. This would be a total return of 11.05% per year with 5.39% from capital gain and 5.66% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $41.26 | $1,031.50 | 25 | 10 | $738.38 | $1,744.00 | $2,482.38 |
The current dividend yield is moderate with dividend growth low. The current dividend yield is moderate (2% to 4% ranges) at 4.44%. The 5, 10 and historical dividend yields are also moderate at 4.23%, 4.68% and 4.36%. The dividend growth is low (below 8% per year) at 3.4% per year over the past 5 years. The last dividend increase was in 2025 and it was for 3.02%.
The Dividend Payout Ratios (DPR) are fine. The DPR for 2024 for Earnings per Share (EPS) is high at 58% with 5 year coverage at 78%. The DPR for 2024 for Adjusted Funds from Operations (AFFO) is good at 68% with 5 year coverage at 75%. The DPR for 2024 for Funds from Operations (FFO) is good at 61% with 5 year coverage at 68%. The DPR for 2024 for Cash Flow per Share (CFPS) is high at 48% with 5 year coverage at 56%. The DPR for 2024 for Free Cash Flow (FCF) is high at 60% with 5 year coverage at 69%. FCF for 2024 goes from 286.6M to 345.7M. Note that the DPR for AFFO and FFO are considered to be the most important DPRs for REITs.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 57.84% | 78.47% |
| AFFO | 67.90% | 74.66% |
| FFO | 60.66% | 68.87% |
| CFPS | 47.68% | 55.74% |
| FCF | 60.13% | 69.15% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2024 is high at 0.71 and currently at 0.68. However, we need also to look at the Long Term Debt/Covering Assets Ratio for 2024 which is good at 0.33 and currently at 0.36 because this is a more important ratio for a REIT. The Liquidity Ratio for 2024 is low at 1.07 and good at 2.81 currently. If you added in Cash Flow after dividends, the ratios are fine at 1.97 and currently at 3.79. The Debt Ratio for 2024 is good at 2.48 and 2.33 currently. The Leverage and Debt/Equity Ratios for 2024 are good at 1.68 and 0.68 and currently at 1.75 and 0.75.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.71 | 0.68 |
| Lg Term C.A. | 0.33 | 0.36 |
| Intang/GW | 0.00 | 0.00 |
| Liquidity | 1.07 | 2.81 |
| Liq. + CF | 1.97 | 3.79 |
| Liq. CF Dt | 1.97 | 3.79 |
| Debt Ratio | 2.48 | 2.33 |
| Leverage | 1.68 | 1.75 |
| D/E Ratio | 0.68 | 0.75 |
The Total Return per year is shown below for years of 5 to 22 to the end of 2024. 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. |
|---|---|---|---|---|---|
| 2019 | 5 | 3.37% | 3.82% | -0.86% | 4.67% |
| 2014 | 10 | 4.16% | 8.57% | 3.16% | 5.41% |
| 2009 | 15 | 11.67% | 18.00% | 9.60% | 8.40% |
| 2004 | 20 | 10.68% | 6.17% | 2.40% | 3.77% |
| 2002 | 22 | 9.78% | 9.29% | 4.89% | 4.39% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 11.41, 12.88 and 14.34. The corresponding 10 year ratios are 6.48, 7.92 and 9.68. The corresponding historical ratios are 7.09, 8.28 and 10.21. The current ratio is 14.53 based on a stock price of $77.61 and EPS for the last 12 months of $5.34. The current 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, in for a REIT, AFFO and FFO values are generally used.
I also have Adjusted Funds from Operations (AFFO) data. The 5-year low, median, and high median Price/Adjusted Funds from Operations Ratios are 14.03, 16.81, and 20.91. The corresponding 10 year ratios are 14.10, 16.33 and 19.29. The corresponding historical ratios are 14.10, 16.33 and 19.29. The current ratio is 14.90 based on a stock price of $77.61 and AFFO estimate for 2025 of $5.21. 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 also have Funds from Operations (FFO) data. The 5-year low, median, and high median Price/Funds from Operations Ratios are 12.71, 15.22 and 20.01. The corresponding 10 year ratios are 14.95, 14.95 and 16.86. The corresponding historical ratios are 11.46, 13.52 and 15.18. The current ratio is 13.38 based on a stock price of $77.61 and FFO estimate for 2025 of $5.80. 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 $105.97 based on FFO. The 10-year low, median, and high median Price/Graham Price Ratios are 0.68, 0.79 and 0.91. The current ratio is 0.73 based on a stock price of $77.61 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 0.98. The current P/B Ratio is 0.90 based a book value of $5,379.3M, Book Value per Share of $86.05 and a stock price of $77.61. The current ratio is 8% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 15.25. The current P/CF Ratio is 13.54 based on Cash Flow for the last 12 months of $359.64M, Cash Flow per Share of $5.73 and a stock price of $77.61. The current ratio is 11% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get an historical median dividend yield of 4.36%. The current dividend yield is 4.38% based on dividends of $3.3996 and a stock price of $77.61. The current dividend yield is 0.5% 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 4.68%. The current dividend yield is 4.38% based on dividends of $3.3996 and a stock price of $77.61. The current dividend yield is 6% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
The 10-year median Price/Sales (Revenue) Ratio is 9.91. The current ratio is 8.08 based on Revenue estimate for 2025 of $602.8M, Revenue per Share of $8.01 and a stock price of $77.61. The current ratio is 18% 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 still reasonable. The dividend yield tests are showing that the stock price is reasonable but above and below the median. The 10 year test says above the median. The P/S Ratio test says that the stock price is reasonable and below the median. All the other tests say the same thing.
When I look at analysts’ recommendations, I find Strong Buy (6) and Buy (4). The consensus would be a Strong Buy. The 12 month stock price consensus is $90.45 with a high of $115.49 and low of $85.00. The consensus stock price of $90.45 implies a total return of 20.93% with 16.54% from capital gains and 4.38% from dividends based on a stock price of $77.61.
Most entries suggest a buy on Stock Chase, but not all. Most mentioned that Magna was a large tenant. Amy Legate-Wolfe on Motley Fool likes this stock for is over 4% dividend. Tony Dong on Motley Fool likes this because of the exposure to an Industrial REIT. He also thinks you need exposure to Residential and Retail REITs. The company put out a press release via Globe and Mail about their fourth quarter of 2024 results. The company put out a press release via Globe and Mail about their second quarter of 2025 results.
Simply Wall Street via Yahoo Finance reviews this stock and suggests it may be undervalued and the fair value is $105.45. Simply Wall Street has one warning on this stock of debt is not well covered by operating cash flow. I find the debt to cash flow is 9.19 years and generally speaking 3 years is what analysts like.
Granite Real Estate Investment Trust is a real estate investment trust engaged in the acquisition, development, ownership, and management of logistics, warehouse and industrial properties in North America and Europe. The vast majority of the company's assets are logistics and distribution warehouses and multipurpose buildings split fairly evenly amongst Canadian, Austrian, and U.S. locations. The company's tenant is Magna International. Its web site is here Granite REIT.
The last stock I wrote about was about was Great-West Lifeco Inc (TSX-GWO, OTC-GWLIF) ... learn more. The next stock I will write about will be K-Bro Linen Inc (TSX-KBL, OTC-KBRLF) ... learn more on Monday, September 29, 2025 around 5 pm.
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