Friday, July 27, 2012

Granite Real Estate 2

I so not own this stock (TSX-GRT, NYSE-GRP), but I used to. I owned it as MI Developments (TSX-MIM.A). I bought this stock in 2003 and some more in 2006. The stock started going down in 2008 and was quite low in 2009. When it recovered a bit, I sold.

The insider trading report shows no insider buying or insider selling over the past year. The report also shows that Granite has been buying back stock for cancellation over the past year. Insiders do not have much in the way of options, but they have substitutes for options called Deferred Share Units and Restricted Share Units. Insiders have a lot more options or options substitutes than they do shares. In fact very few insiders have shares.

There are some 119 institutions that hold 78.5% of the outstanding shares on July 27, 2012. Over the past 3 months institutions have reduced their holdings by 3.9%. This is certainly a negative.

I can get no fix on historical median Price/Earnings Ratios as there have been a number of years with negative earnings and earnings have also bounced around a lot. The current P/E Ratio is 17 on a stock price of $35.19. This is a reasonable P/E Ratio.

I get 10 year low, median and high Price/Graham Price Ratios of 1.04, 123 and 1.41. The current P/GP Ratio of 1.16 on a stock price of $35.19 is a reasonable ratio and shows a reasonable stock price.

I get a 10 year Price/Book Value Ratio of 0.73. The current one of 1.63 is 125% higher. However, a P/B Ratio of 0.73 is a very low P/B Ratio and 1.63 is a reasonable one. On a relative basis, the P/B Ratio is high, but not on an absolute basis.

The 5 year median dividend yield is 2.8%. The current dividend yield is a lot higher, in fact 103% higher at 5.68%. This shows that the current stock price is quite low. However, the company has just increased the dividend by a lot.

When I look for analysts' recommendations, I find only one and it is a Buy. This stock is also listed on the NYSE and The Street has just upgraded NYSE-GRP from a Hold to a Buy. See their site. Seeking Alpha did a screening for high profit, high yield stock with Analysts confidence and this is one of three companies they came up with. See their site.

It has a very good yield and a reasonable stock price. Others may like this company, but it would not be my first choice for a real estate stock at the moment.

Granite is a global real estate operating company engaged principally in the acquisition, development, construction, leasing, management and ownership of a predominantly industrial rental portfolio of properties in North America and Europe leased primarily to Magna and its automotive operating units. Members of the Magna International Inc. group of companies are our primary tenants. Its web site is here Granite Real Estate. See my spreadsheet at grt.htm.

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. See my website for stocks followed and investment notes. Follow me on twitter.

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