I do not own this stock of Granite REIT (TSX-GRT.UN, NYSE-GRP.U). I first bought some of this stock in 2003 when it was called MI Developments (TSX-MIM.A). It was a company connected with Frank Stronach and Magna. TD bank also had an Action Buy Call (Strong Buy) on this stock. By the December 2006, it was doing well and my stock was up some 15% per year. I bought some more. The year of 2006 was the last time I did well on this stock. It kept going down and I sold it in 2009; being discourage it would ever do well again.
When I was updating my spreadsheet, I noticed if I had kept my shares, I would have probably made a total return of 9.33% per year. I noticed that it had a mixed record for dividends. Over the past 17 years, dividends went up 13 times, but were cut 4 times.
The dividend yields are moderate with dividend growth low. The current dividend yield is moderate (2% to 4% ranges) at 3.24%. The 5, and 10 median dividend yields were good (5% to 6% ranges) at 5.17% and 5.47%. The historical median dividend yield was moderate at 4.68%. The dividend increases for the past 5 years is in the low range (below 8%) at 4.74% per year.
The Dividend Payout Ratios (DPR) are fine as the important ones for REITS are the DPRs for FFO and AFFO. The DPR for EPS for 2021 is 38% with 5 year coverage at 36%. Since this is a REIT, I also look at the DPR for Funds from Operations (FFO) which is for 2021 is 73% and with 5 year coverage at 76%. I have also looked at the DPR for Adjusted Funds from Operations (AFFO), which for 2021 is 76% with 5 year coverage at 81%. (Basically, for FFO and AFFO, DPRs from 75% to 95% are acceptable.) The DPR for Cash Flow per Share is 66% with 5 year coverage at 71%. The DPR for Free Cash Flow for 2021 and for 5 year coverage are both negative.
Debt Ratios are good. The Long Term Debt/Market Cap Ratio is 0.40. The Liquidity Ratio for 2021 is 2.26. The Debt Ratio for 2021 is 2.39. Leverage and Debt/Equity Ratios for 2021 is 1.72 and 0.72
The Total Return per year is shown below for years of 5 to 18 to the end of 2020 in CDN$. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2015 | 5 | 4.74% | 21.25% | 15.46% | 5.79% |
| 2010 | 10 | 19.27% | 16.45% | 11.14% | 5.30% |
| 2005 | 15 | 10.75% | 7.43% | 4.53% | 2.90% |
| 2002 | 18 | 11.37% | 9.03% | 6.11% | 2.93% |
The Total Return per year is shown below for years of 5 to 18 to the end of 2020 in US$. 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. |
|---|---|---|---|---|---|
| 2015 | 5 | 6.51% | 23.27% | 17.33% | 5.94% |
| 2010 | 10 | 16.39% | 13.35% | 8.43% | 4.92% |
| 2005 | 15 | 10.08% | 6.91% | 3.92% | 2.99% |
| 2002 | 18 | 11.47% | 10.85% | 7.38% | 3.47% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 5.42, 6.84 and 7.60. The corresponding 10 year ratios are 7.09, 8.28 and 10.21. The corresponding 10 year ratios are 6.48, 7.92 and 9.38. The current P/E Ratio is 12.23 based on a stock price of $92.70 and EPS for last 12 months of $7.23. The current P/E Ratio is above high of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
Because this is an REIT, we also need to look at Price/Adjusted Funds from Operations. The 5 year low, median, and high median P/AFFO Ratios are 14.16, 15.85 and 19.03. The corresponding 10 year ratios are 13.26, 15.67 and 17.92. The current P/AFFO is 25.40 based on AFFO estimate for 2021 of $3.65 and a stock price of $92.70. The current P/AFFO ratio is above the high of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
Because this is an REIT, we also need to look at Price/ Funds from Operations. The 5 year low, median, and high median P/FFO Ratios are 13.09, 14.73 and 15.99. The corresponding 10 year ratios are 11.49, 13.71 and 15.33. The current P/AFFO is 23.53 based on FFO estimate for 2021 of $3.94 and a stock price of $92.70. The current P/FFO ratio is above the high of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $81.37. The 10 year low, median, and high median Price/Graham Price Ratios are 0.72, 0.79 and 0.88. The current P/GP Ratio is 1.14 based on a stock price of $92.70. The current ratio is above the 10 year median ratio. 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 1.05. The current P/B |Ratio is 1.24 based on a Book Value of $4,607M, Book Value per Share of 74.69 and a stock price of $92.70. The current ratio is 18% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10 year median Price/Cash Flow per Share Ratio of 14.07. The current P/CF Ratio is 22.55 based on Cash Flow for the last 12 months of $253.57, Cash Flow per Share of $6.79 and a stock price of $92.70. The current ratio is 60% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 4.68%. The current dividend yield is 3.24% based on dividends $3.00 and a stock price of $92.70. The current dividend yield is 31% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median dividend yield of 5.47%. The current dividend yield is 3.24% based on dividends $3.00 and a stock price of $92.70. The current dividend yield is 41% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
The 10 year median Price/Sales (Revenue) Ratio is 9.07. The current P/S Ratio is 14.63 based on Revenue estimate for 2021 of $391, Revenue per Share of $6.34 and a stock price of $92.70. The current ratio is 61% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
Note that for the P/S Ratio test to show results of the stock price is relatively reasonable and below the median, the stock price would have to drop around $57.00. At $57.00 then the current ratio would be 0.83% below the 10 year median ratio. Therefore, to get a reasonable price below the median, the stock price would have to fall 38.5%.
Results of stock price testing is that the stock price is a stock price that is expensive. Both the dividend yield test shows this as does the P/S Ratio test. In fact, all the tests show the same thing, a stock price that is relatively expensive.
Is it a good company at a reasonable price? The stock price seems on the expensive side. This REIT seems to be doing much better than when I held it.
When I look at analysts’ recommendations, I find Strong Buy (3) and Buy (8). The current consensus would be a Strong Buy. The 12 month stock price consensus is $97.18. This implies a total return of $8.07% with 4.83% from capital gains and $3.24% from dividends. This is based on a current stock price of $92.70.
Analysts on Stock Chase like this company and say it is a buy. Robin Brown on Motley Fool says this REIT has a great development and acquisition pipeline that should help fuel steady cash flow per share growth. The executive summary on Simply Wall Street gives this stock 3 stars out of 5 and list 3 risks. A writer on Simply Wall Street talks about who owns shares in this company. A writer on Simply Wall Street talks about insider trading.
Granite Real Estate Investment Trust, or Granite, is a real estate investment trust engaged in the acquisition, development, and management of primarily industrial properties in North America and Europe The vast majority of the company's assets are logistics and distribution warehouses and multipurpose buildings split fairly evenly amongst Canadian, Austrian, and U.S. locations. Granite derives nearly all of its revenue in the form of rental income from its properties. The company's largest tenant is Magna International, an automotive parts and systems manufacturer, which accounts for the majority of Granite's lease income. Its web site is here Granite REIT.
The last stock I wrote about was about was Alcanna Inc (TSX-CLIQ, OTC-LQSIF) ... learn more. The next stock I will write about will be K-Bro Linen Inc (TSX-KBL, OTC-KBRLF) ... learn more on Wednesday, September 22, 2021 around 5 pm. Tomorrow on my other blog I will write about Money Sense on Debt.... learn more on Tuesday, September 21, 2021 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.
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. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
No comments:
Post a Comment