Artis REIT

Sound bite for Twitter and StockTwits is: Price is reasonable, below median. This is a stock I am not currently interested in because it is not a dividend growth stock and I do not like the Liquidity Ratios. See my spreadsheet on Artis REIT.

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. A number of people I correspond with mentioned this REIT. However, my first view of it is not positive. It is also not a dividend growth stock.

This REIT was started in 2004 and has been paying dividends since 2005 some 11 years ago. In the beginning it raised its dividends, but that has not occurred since 2009. Since there is not much history to draw from I must draw the conclusion that it is not a dividend growth stock until it proves otherwise. Dividend growth is at 0% and 3.8% per year over the past 5 and 10 years

The Dividend Payout Ratios against FFO and AFFO was at 72.5% and 83.1% for 2015. There was an earning loss in 2015 because of Fair Value Loss on some Artis investment property. Because EPS has jumped around a lot it is hard to get a fix on it for Dividend Payout Ratios. However, for the 4 years previous to 2015, it was under 100%. The DPR for CFPS was 83% in 2015 and its 5 year median value is 73%.

Outstanding shares have growth a lot over the past 5 and 10 years with growth at 13% and 33% per year. There were big jumps in shares in 2007 (105%) and 2010 (101%). Shares have growth due to Stock Issues, Conversion of Debentures, DRIP and Stock Options. Still growth in revenue and cash flow is good. For example Revenue has grown by 22.8% and 49.4% per year over the past 5 and 10 years. Revenue per Share has grown at 8.7% and 12.3% per year over the past 5 and 10 years. Revenue per Share growth is still good.

What I do not like in debt ratios is the Liquidity Ratio. It is hopeless low no matter how you look at it. Current Assets cannot cover current Liabilities. This gives the company vulnerability.

When looking at Price and both FFO and AFFO, the stock price appears to be reasonable and below the median. For example, the 5 year low, median and high median Price/FFO Ratios are 9.74, 10.63 and 11.54. The 10 year low, median and high median P/FFO Ratios are 9.48, 10.51 and 11.60. The current P/FFO is 8.97 based on 2016 FFO estimate of $1.51 and a stock price of $13.55. This stock price testing suggests that the stock price is reasonable and below the median.

I get a Graham Price of $22.10. The 10 year low, median and high median Price/Graham Price Ratios are 0.63, 0.95 and 1.20. The current P/GP Ratio is 0.61 based on a stock price of $13.55. This stock price testing suggests that the stock price is cheap. (See my site and blog for information on Graham Price.)

The 10 year Price/Book Value per Share Ratio is 0.93. The current P/B Ratio is 0.87 a value some 6.6% lower. The current P/B Ratio is based on a stock price of $13.55 and BVPS of $15.62. This stock price testing suggests that the stock price is reasonable and below the median. (See blog for information Book Values.)

The historical median dividend yield is 7.15%. The current dividend yield is 7.97% based on dividends (or distributions of) $1.08 and a stock price of $13.55. The current dividend yield is some 11% higher than the historical median dividend yield. This suggests that the stock price is reasonable and below the median.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold Recommendations. The consensus would be a Buy recommendation. The 12 month stock price would be $14.44. This implies total return of $14.545 with 7.97% from dividends and 6.57% from capital gains. (See my blog for information on Analyst Ratings .)

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see those reports here and here.

Yesterday on my other blog I wrote about stocks being a Value Trap... learn more . The next stock I will write about will be Atlantic Power Corp. (TSX-ATP, NYSE-AT)... learn more on Monday, July 18, 2016 around 5 pm.

Artis REIT's portfolio is comprised of industrial, retail, and office space in Canada and the United States. Its web site is here Artis REIT.

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. 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.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits.