I do not own this stock of Allied Properties Real Estate Investment Trust (TSX-AP.UN, OTC-APYRF). Since several stocks that I followed in 2015 were deleted from the stock exchange, I was looking for other stocks to follow. I am sure that I got this from a Canadian Dividend site called Think Dividends, but I cannot find it at present.
When I was updating my spreadsheet, I noticed that shares have increased by 8.67% and 12.77% per year over the past 5 and 10 years. The per share growth in revenue, which are the ones that count when shares are increase, is low to negative. The Revenue growth looks good at 7.64% and 12.66% per year over the past 5 and 10 years, but the real growth is Revenue per Share and it is negative. Revenue per Share is now by 0.93% and 0.09% per year over the past 5 and 10 years.
However, what is more important is the 5 year running averages. The Revenue growth using 5 year running averages is very good at 12.23% and 17.93%. Revenue per Share using 5 year running average is over the 5 and 10 years is 1.83% and 3.01%. This is still a lot lower than Revenue Growth.
The dividend yield runs from moderate to good. Most are in the moderate range. The current dividend yield is 3.31%, with 5, 10 and historical median dividend yields at 4.05%, 4.39% and 5.69%. The stock started with higher yields and that is why the historical median is much higher than other median yields.
As is usual for REITs the dividend growth is low. As with other REITs they do not increase their dividends every year, but the record for this REIT is not bad with increases in 11 of the past 15 years.
The Dividend Payout Ratio coverage looks fine to me. The DPR for EPS for 2018 is 28% with 5 year coverage at 39%. Generally, for REITs the coverage by Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) are looked at. The DPR for 2018 for FFO is 72% with 5 year coverage at 70%. The DPR for 2018 for AFFO is 87% and 5 year coverage at 85%.
The debt ratios are fine but with some vulnerability with the Liquidity Ratio. There is always the possibility that they cannot rollover their debt. The Long Term Debt/Market Cap Ratio for 2018 is 0.40. The Liquidity Ratio is low. If you look at the Liquidity Ratio and add in Cash Flow after Dividends and Debt due currently and Prepaid Items it is 1.22. The Debt Ratio is 2.88. Leverage and Debt/Equity Ratios are 1.53 and 0.53.
The Total Return per year is shown below for years of 5 to 24 to the end of 2018. 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 charts below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2013 | 5 | 2.04% | 10.30% | 6.23% | 4.06% |
| 2008 | 10 | 1.80% | 20.63% | 13.54% | 7.10% |
| 2003 | 15 | 4.34% | 15.01% | 8.60% | 6.41% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 8.20, 9.29 and 10.38. The corresponding 10 year ratios are 8.31, 9.27 and 10.22. The corresponding historical ratios are 11.06, 12.64 and 14.22. The current P/E Ratio is 21.40 based on a stock price of $48.15 and 2019 EPS estimate of $2.25. This stock price testing suggests that the stock price is relatively expensive.
Because this is a REIT, we should redo the above using FFO. The 5 year low, median, and high median P/FFO Ratios are 15.27, 16.73 and 18.99. The corresponding 10 year P/FFO Ratios are 14.74, 16.67 and 18.24. The current P/FFO Ratio is 21.50 based on a stock price of $48.15 and FFO estimate for 2019 of $2.24. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $46.07. The 10 year low, median, and high median Price/Graham Price Ratios are 0.79, 0.89 and 0.98. The current P/GP Ratio is 1.05 based on a stock price of $48.15. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median Price/Book Value per Share Ratio of 1.07. The current P/B Ratio is 1.14 based on Book Value of $4,375M, Book Value per Share of $42.12 and a stock price of $48.15. This stock price testing suggests that the stock price is relatively reasonable and above the median.
I get an historical median dividend yield of 5.69%. The current yield is 3.31% based on dividends of $1.60 and a stock price of $48.15. The current yield is 42% below the historical yield. This stock price testing suggests that the stock price is relatively expensive.
The 10 year median Price/Sales (Revenue) Ratio is 7.43. The current P/S Ratio is 10.73 based on Revenue estimate for 2019 of $466M, Revenue per Share of $4.49 and a stock price of $48.15. The current ratio is 44% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that the stock price is in the relatively expensive range. The one exception is the P/B Ratio test and it still shows a price above the median. In any case, it would seem that now is not a good time to buy this REIT.
When I look at analysts’ recommendations, I find Buy (8) and Hold (2). The consensus would be a Buy. The 12 month stock consensus is $50.50. This implies a total return of 8.20% with 4.88% from capital gains and 3.31% from dividends.
See what analysts are saying about this stock on Stock Chase. They like the REIT but feel its price is too high. Kay Ng on Motley Fool thinks this REIT is currently too expensive. A writer on Simply Wall Street talks about the FFO to Debt Ratio. A writer on What’s on Thorold talks about recent analysts ratings. Joseph Taylor on K Reviewer talks about analysts target prices.
Allied Properties Real Estate Investment Trust is a real estate investment trust engaged in the development, management, and ownership of primarily urban office environments across Canada's major cities. Most of the total square footage in the company's real estate portfolio is located in Toronto and Montreal. Its web site is here Allied Properties Real Estate Investment Trust.
The last stock I wrote about was about was RioCan Real Estate (TSX-REI.UN, OTC-RIOCF) ... learn more. The next stock I will write about will be H & R Real Estate Trust (TSX-HR.UN, OTC-HRUFF) ... learn more on Friday, March 8, 2019 around 5 pm. Tomorrow on my other blog I will write about Something to Buy March 2019.... learn more on Thursday, March 07, 2019 around 5 pm.
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