Is it a good company at a reasonable price? The problem I see is that Revenue, AFFO, and FFO are expected to decline in 2025 and even for 2026 not be at the 2024 level. Earnings are expected to be negative. You have to wonder about dividends as DPRs are currently high and expected to go higher. The only positive is that there is some insider buying. So, buying this REIT is probably on the risky side. The current stock price is testing as relatively reasonable.
I do not own this stock of Artis REIT (TSX-AX.UN, OTC-ARESF). Early in 2013, this company was mentioned as a good REIT to own. Several people I correspond with mentioned this REIT. However, my first view of it is not positive. It is also not a dividend growth stock in 2013.
When I was updating my spreadsheet, I noticed that this company is not doing well. Revenue is going down as is Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO). Analysts expect this to continue over the next two years.
If you had invested in this company in December 2014, for $1,006.78 you would have bought 71 shares at $14.18 per share. In December 2024, after 10 years you would have received $580.71 in dividends. The stock would be worth $522.56. Your total return would have been $1,103.27. This would be a total return of 1.27% per year with 6.35% from capital loss and 7.62% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $14.18 | $1,006.78 | 71 | 10 | $580.71 | $522.56 | $1,103.27 |
The current dividend yield is high with dividend growth currently flat after a decrease. The current dividend yield is high (7% and higher) at 7.74%. The 5 year dividend yield is good (5% to 6% ranges at 5.62%. The 10 year and historical median dividend yields are good at 7.17% and 7.38%. The dividends were cut in 2018. There was an increase in 2021 and dividends since then have been flat.
The Dividend Payout Ratios (DPR) are mostly fine. The DPR for 2024 for Earnings per Share (EPS) is non-calculable because of earnings losses. The DPR for 2024 for Adjusted Funds from Operations (AFFO) is fine at 92% with 5 year coverage at 71%. The DPR for 2024 for Funds from Operations (FFO) is good at 57% with 5 year coverage at 48%. The DPR for 2024 for Cash Flow per Share (CFPS) is far too high at 71% with 5 year coverage at 61%. I prefer this DPR be at 40% or lower. The DPR for 2024 for Free Cash Flow (FCF) is too high at 108% with 5 year coverage at 74%. No one agrees on what the FCF and there are wide differences.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | -105.26% | -347.86% |
| AFFO | 92.31% | 71.26% |
| FFO | 57.14% | 47.85% |
| CFPS | 71.23% | 60.73% |
| FCF | 108.00% | 73.56% |
Debt Ratios are mostly fine but the Liquidity Ratio can sometimes be a problem. The Long Term Debt/Market Cap Ratio for 2024 is high at 0.85 and currently at 0.80. However, we need also to look at the Long Term Debt/Covering Assets Ratio for 2024 which is good at 0.28 and currently at 0.26 because this is a more important ratio for a REIT. The Liquidity Ratio for 2024 is low at 1.09 and far too low at 0.44 currently. If you added in Cash Flow after dividends, the ratios are still low at 1.12 and currently far too low at 0.47. If you add back the current portion of the long term debt the ratio is fine at 7.39 and currently at 2.76. The Debt Ratio for 2024 is good at 2.29 and 2.35 currently. The Leverage and Debt/Equity Ratios for 2024 are good at 1.77 and 0.77 and currently at 1.74 and 0.74.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.85 | 0.80 |
| Lg Term R +A | 0.28 | 0.26 |
| Intang/GW | 0.00 | 0.00 |
| Liquidity | 1.09 | 0.44 |
| Liq. + CF | 1.12 | 0.47 |
| Liq,CF,DB | 7.39 | 2.76 |
| Debt Ratio | 2.29 | 2.35 |
| Leverage | 1.77 | 1.74 |
| D/E Ratio | 0.77 | 0.74 |
The Total Return per year is shown below for years of 5 to 20 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 | 2.13% | -2.26% | -9.16% | 6.90% |
| 2014 | 10 | -5.71% | 1.27% | -6.35% | 7.62% |
| 2009 | 15 | -3.84% | 6.97% | -2.86% | 9.84% |
| 2004 | 20 | -1.14% | 16.23% | 0.90% | 15.33% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are negative and so useless. The corresponding 10 year ratios are 6.07, 6.56 and 7.07. The corresponding historical ratios are 3.18, 3.59 and 4.01. The current P/E Ratio is negative and so unusable as EPS is expected to be a $0.13 loss.
I have Adjusted Funds from Operations (AFFO) data. The 5-year low, median, and high median Price/Adjusted Funds from Operations Ratios are 9.40, 11.67 and 13.40. The corresponding 10 year ratios are 9.26, 11.19 and 13.09. The corresponding historical ratios are 9.49, 11.78 and 13.34. The current P/AFFO is 15.82 based on AFFO estimate for 2025 of $0.49 and a stock price of $7.75. 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.
I have Funds from Operations (FFO) data. The 5-year low, median, and high median Price/Funds from Operations Ratios are 5.59, 7.31 and 9.03. The corresponding 10 year ratios are 6.68, 8.16 and 9.41. The corresponding historical ratios are 7.82, 9.06 and 10.44. The current P/FFO is 9.34 based on FFO estimate for 2025 of $0.83 and a stock price of $7.75. This ratio is between the median and high ratios of the 10 year median ratios This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a Graham Price of $11.88. The 10-year low, median, and high median Price/Graham Price Ratios are 0.48, 0.58 and 0.70. The current P/GP Ratio is 0.65 based on a stock price of $7.75. The current ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median. I am using AFFO figures in the calculation as EPS has too many loss earning years.
I get a 10-year median Price/Book Value per Share Ratio of 0.64. The current ratio is 0.60 based on a stock price of $7.75, Book Value of $1,267 and Book Value per Share of $12.81. This ratio is 6% 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 8.43. The current ratio is 9.95 based on Cash Flow for the last 12 months of $77.00, Cash Flow per Share of $0.78 and a stock price of $7.75. The current ratio is 10% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get an historical median dividend yield of 7.38%. The current dividend yield is 7.74% based on dividends of $0.60 and a stock price of $7.75. The current dividend yield is 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 7.75%. The current dividend yield is 7.74% based on dividends of $0.60 and a stock price of $7.75. The current dividend yield is 0.40% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The 10-year median Price/Sales (Revenue) Ratio is 3.33. The current P/S Ratio is 3.18 based on Revenue estimate for 2025 of $241M, Revenue per Share of $2.43 and a stock price of $7.75. The current ratio is 4% 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. The dividend yield testing is saying that the stock price is relatively reasonable. This is confirmed by the P/S Ratio test. The rest of the testing is suggesting the stock price is reasonable, but above the median or expensive.
When I look at analysts’ recommendations, I find only Holds (2). The consensus would be a Hold. The 12 month stock price consensus is $7.25 with a high $7.50 and low of $7.00. The stock price consensus of $7.25 imply a total return of 1.29% with a capital loss of 6.45% and dividends of 7.74% based on a current stock price of $7.75.
There is one entry on Stock Chase and analyst says the company is in transition and so difficult to analyst. Amy Legate-Wolfe on Motley Fool says the stock may not be flashy, but it is currently delivering reliable monthly cash. Ambrose O'Callaghan on Motley Fool says buy this stock for is passive income. The company put out a press release via Newswire about its fourth quarter results for 2024. The company put out a Press Release via Newswire about their first quarter of 2025.
Simply Wall Street via Yahoo Finance reviews this stock. A lot of the review is negative, but they point out insider buying. Simply Wall Street has 3 warnings out on this stock of earnings have declined by 41.4% per year over past 5 years; interest payments are not well covered by earnings; and dividend of 7.8% is not well covered by earnings.
Artis Real Estate Investment Trust is an unincorporated closed-end real estate investment trust created under, and governed by, the laws of the Province of Manitoba. The REIT owns, manages, leases, and develops industrial, office, retail and residential properties in Canada and the United States, and holds other real estate investments. Its web site is here Artis REIT
The last stock I wrote about was about was Obsidian Energy Ltd (TSX-OBE, NYSE-OBE) ... learn more. The next stock I will write about will be Dorel Industries Inc (TSX-DII.B, OTC-DIIBF) ... learn more on Monday, July 21, 2025 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.
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