I do not own this stock of First Capital Realty (TSX-FCR, OTC-FCRGF). In 2011 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.
When I was updating my spreadsheet, I noticed that there was a lot of insider selling in the past, but for 2019 it was at 0.02% which is a normal amount. Insider selling hit a high of 0.38% in 2015 and it has been declining since. Also, over the years the CEO, CFO and a long time director have been increasing their shares. (Their chairman of the Board is new within the last year.)
The dividends are currently moderate (2% to 4% range) with a current dividend of 4.02%. The 5, 10 and historical median dividend yields are 4.51%, 4.61% and 4.95%. There has been little in the way dividend increases since 2008. There was a 5% increase in 2012 and there was a 2.38% increase in 2015 and that is all.
The Dividend Payout Ratios are fine. The DPR for EPS for 2018 was 63% with 5 year coverage at 58%. The DPR for CFPS for 2018 is 49% with 5 year coverage at 48%. The DPR for FCF is 54% for 2018 with 5 year coverage at 64%.
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2018 is 0.83. The Liquidity Ratio for 2018 is 0.68. If you add in cash flow after dividends and add back in the current portion the of the long term debt, it is 1.63. The Debt Ratio is 1.92 for 2018 with 5 year median at 1.87. The Leverage and Debt/Equity Ratios for 2018 are 2.09 and 1.09 with 5 year medians at 2.26 and 1.26.
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 chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2013 | 5 | 0.47% | 5.98% | 1.26% | 4.72% |
| 2008 | 10 | 0.73% | 10.88% | 4.75% | 6.14% |
| 2003 | 15 | 1.19% | 10.95% | 4.36% | 6.59% |
| 1998 | 20 | 2.45% | 8.72% | 3.00% | 5.72% |
| 1994 | 24 | 6.73% | 12.93% | 5.16% | 7.76% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 12.28, 13.91 and 15.53. The corresponding 10 year Ratios are 14.33, 15.97 and 17.62. The corresponding historical ratios are 16.38, 19.62 and 21.11. The current P/E Ratios are 16.32 based on 2019 EPS estimate of $1.31 and a stock price of $21.38. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a Graham Price of $23.98. The 10 year low, median, and high median Price/Graham Price Ratios are 0.79, 0.89 and 0.99. The current P/GP Ratio is 0.89 based on a stock price of $12.38. This stock price testing suggests that the stock price is relatively reasonable and at the median.
I get a 10 year median Price/Book Value per Share Ratio of 1.17. The current P/B Ratio is 1.10 based on Book Value of $4,273M, Book Value per Share of $19.50 and a stock price $21.38. The current ratio is 6% below the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get an historical median dividend yield of 4.95. The current dividend yield is 4.02% based on dividends of $0.86 and a stock price of $21.38. The current dividend 19% below the historical yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10 year median dividend yield of 4.61. With a current dividend yield of 4.02%, the current yield is 13% below the 10 year median yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
The 10 year median Price/Sales (Revenue) Ratio is 6.26. The current P/S Ratio is 6.23 based on Revenue estimate for 2019 of $752M, Revenue per Share of $3.43 and a stock price of $21.38. The current ratio is 0.5% below the 10 year ratio. This stock price testing suggests that the stock price is relatively reasonable and at the median.
Results of stock price testing is that the stock price is probably reasonable, if not a little on the high side. The P/S Ratio test is a good and points to a price at the median. The dividend yield is a good one and it is pointing to a stock price above the median. The problem with the dividend yield test is that there has been not much in increases lately. This, of course, points to how management feels about the future and lack of increases say they are negative or cautious. Most of the testing is fine.
Is it a good company at a reasonable price? The price is probably reasonable. Their shareholders have done fine over the year, but it would be nice is they started to increase their dividends again. This company is considered to be a moderate risk. It is a good sign the reduction in insider selling.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (3) and Hold (3). The consensus would be a Buy. The 12 month stock price consensus is $23.81. This implies a total return of 15.39% with 11.37% from capital gains and 4.02% from dividends.
See what analysts are saying on Stock Chase. There is little coverage of this company, but the last note is positive. Rahim Bhayani of Motley Fool likes this stock because of its high quality properties. A writer on Simply Wall Street thinks the company is buying out more in EPS and CF than he likes. A writer on Simply Wall Street talks about insider trading. The company discusses its third quarter results on Newswire.
First Capital Realty Inc is a Canada-based owner, developer, and manager of grocery-anchored urban properties. Historically, revenue contributions have come from supermarkets, drugstores, banks, liquor stores, restaurants, fitness centers, medical and childcare facilities, and other personal services. Its web site is here First Capital Realty.
The last stock I wrote about was about was DHX Media Ltd (TSX-DHX, OTC-DHXMF) ... learn more. The next stock I will write about will be Stella-Jones Inc (TSX-SJ, OTC-STLJF) ... learn more on Monday, December 9, 2019 around 5 pm.
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.
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