H & R Real Estate Trust

I do not own this stock of H & R Real Estate Trust (TSX-HR.UN, OTC-HRUFF). Before I started blogging, I was following a number of REITs and this is one I had followed. It also used to be on a dividend list I followed. They are not on any dividend list that I know of at this time.

Since this company cut their dividend in 2009, they have again been doing dividend increases. The cut was a 50% one and although there has been some nice dividend increases since, they are still some 6% below the dividend of 2008. The most recent increase was in 2013 and it was an 8% increase.

The current Dividend Payout Ratios seem fine. Last year was a one year that they did not payout in dividends more than they earned. The DPR for EPS for 2012 was 50%. The DPR for CFPS was 42% as was the 5 year median DPR for CFPS. The DPR for FFO for 2012 was 68% and is expected to be 77% for 2013. Dividend growth over the past 5 and 10 years is a decline of 3% and 0% per year.

The total return has been good with the 5 and 10 year total return at 31.85% and 9.60% per year with 23.17% and 2.89% per year from capital gains and 8.68% and 6.71% per year from dividends.

Outstanding share have increased by 8.7% and 10.6% per year over the past 5 and 10 years. They have increased due to Share Issues, Stock Options, DRIP and Debenture Conversions.

Revenue has increased by 7.5% and 11% per year over the past 5 and 10 years. However, Revenue per Share is down by 1% and 0% per year over the past 5 and 10 years.

If you look at EPS using the 5 year running averages, it is up by 4% per year over the past 5 years and down by 2% over the past 10 years. (I used 5 year running averages because of negative earning years.) The AFFO is down by 19.5% and 3% per year over the past 5 and 7 years. (AFFO values only go back some 7 years.) The FFO is down by 0% and 2.3% per year over the past 5 and 10 years. This is not a great showing.

However, there have been increases in AFFO and FFO over the past few years and both are expected to be up this year. The AFFO and FFO are up by 1% and 2% for the 12 months to the end of the Quarter 3 compared to the 12 months to the end of 2012.

The Return on Equity and really been quite low for a number of years until 2012. For 2012 the ROE was 11.3%, which is respectable. The ROE on comprehensive income was close at 11%. However, the 12 months to the end of Quarter 3, 2013, the ROE is back being quite low at just 5%.

The Liquidity Ratios are generally quite low on this stock, but current cash flow does pull them up. The current Liquidity Ratio is just 0.99. However, with cash flow after dividends this ratio is at 2.13. The Debt Ratio is generally fine with the current one at 1.85. The current Leverage Debt/Equity Ratios at 2.18 and 1.18 are typical for a real estate company.

My overall impression is that although they are growing their revenues per share growth is negligible. See my spreadsheet at hr.htm.

This is the first of two parts. Second part will be posted on Friday, December 12, 2013 and will be available here.

H&R Real Estate Investment trust is an open-ended real estate investment trust. They have a portfolio of office properties, single-tenant industrial properties, retail properties and development projects. They operate across Canada and US. Its web site is here H & R Real Estate .

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.