Wednesday, December 5, 2012

First Capital Realty

On my other blog I am today writing Tax Free Savings Accounts...continue...

I do not own this stock (TSX-FCR, OTC-FCRGF). Last year a reader asked me to review this real estate stock. Also, The site Canadian Dividend Stock site mentions this company as a top Canadian REIT.

Dividend increases over the past 5 years is only at 1.03%. The 10 year increase is better at 2.92%. Times might be looking up also as the last dividend increase, for 2012 was for 5%. Investors who have held this stock for around 10 years are getting a yield on their original stock purchase price of around 9 to 11%. This is good.

The Dividend Payout Ratios for earnings was very high (300%) until the company changed to the IFRS account rules. Since then the DPR for earnings is the 42% neighbourhood. The DPR for cash flow has been around 79%.

Total return is at 4.83% for the last 5 years with 4.90% coming from distributions and with a capital loss of 0.07%. The total return for the last 10 years is at 14.74% with 7.05% from distributions and 7.69% from capital gain.

The number of outstanding shares has been increasing with the increase being at 8% per year over the past 5 years and at 22% per year over the past 10 years. Outstanding shares increased by some 9% in 2011 with 0.06% from new issues, 0.76% from interest on convertible debentures, 7.74% from conversion of convertible debentures and 0.48% from stock options. The increase for the first 9 months of 2012 is even higher at 15.7%.

Revenue has increase by 9.6% and 14% per year over the past 5 and 10 years. However, revenue per share is a lot different because of the increasing number of outstanding shares. Revenue per share has increase by 1.4% per year over the past 5 years and has decreased by 6.4% per year over the past 10 years.

Because Earnings per Share was bumped up by around 960% in 2011 with the new accounting rules it looks like EPS has really increased. For real estate companies, analysts look at the Funds from Operations (FFO) and most recently at Adjusted Funds from Operations (AFFO).

I have FFO per share figures from last 5 and 10 years and the FFO has gone down by 0.6% and 0.2% per year over these time periods. For AFFO per share, I only have figures for 5 years and AFFO has gone up by 1.4% per year over the past 5 years.

Cash flow per share is not much better with CFPS increasing 1.1% per year over the past 5 years and down by 4.2% per year over the past 10 years. It is hard to how to judge the book value per share because there was a big bump up in book value (95%) with the new accounting rules. Book Value is down 2% per year over the past 5 years, but up 12.4% per year over the past 5 years.

Return on Equity was running around 3 to 6% until this years and the big bump up in earnings caused it to be 21% for the financial year of 2011. The ROE on comprehensive income is the same at 21% for 2011.

As far as debt ratios goes, the Liquidity Ratio has never been that great. The current one is 1.30. The one for the financial year of 2011 was 0.47. If the ratio is below 1.00 it means that current assets cannot cover current liabilities. If for the financial year of 2011 you exclude the current portion of their debts the ratio is better at 1.22. (However, I like to see the ratio at 1.50 or better.)

The Debt Ratios have been generally ok and they are good for the financial year ending in 2011 at 1.66 and currently at 1.81. The current Leverage and Debt/Equity Ratios are ok at 2.24 and 1.24.

It would be nice to see some growth per share with this company. As an investor you buy shares and it is really the per share values that count.

First Capital Realty is Canada's leading owner, developer and operator of supermarket and drugstore anchored neighbourhood and community shopping centers, located predominantly in growing metropolitan areas. Its web site is here First Capital. See my spreadsheet at fcr.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 or StockTwits.

1 comment:

  1. Great analysis as usual Susan. I like this guy...owned it for a while now and have intention of selling it anytime soon.