Is it a good company at a reasonable price? I think that the stock price is reasonable at this time. The Liquidity Ratio is a problem. However, this has always been low and they have managed in the past. They have done well as a REIT for their shareholders in the past.
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 although Revenue is growing nicely, Revenue per Share is not. Revenue has increase by 8% and 11% per year over the past 5 and 10 years. Revenue per Share has decreased by 0.6% and increase by 1.65% per year over the past 5 and 10 years. This is because the growing number of outstanding shares. Shareholders should be interested in growth of both these items.
If you had invested in this company in December 2011, $1002.38 you would have bought 40 shares at $25.28 per share. In December 2021, after 10 years you would have received $607.86 in dividends. The stock would be worth $1,758. Your total return would have been $2,365.86.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $25.28 | $1,011.20 | 40 | 10 | $607.86 | $1,758.00 | $2,365.86 |
The dividend yields are moderate with dividend growth low. The current dividend yield is moderate (2% to 4% ranges) at 4.05%. The 5, 10 and historical median dividend yields are also moderate at 3.68%, 4.05% and 4.71%. The dividend increases are low (below 8%) with increases for the past 5 years at 2.08% per year. The last dividend increase was in 2022 and it was for 2.89%.
In the chart below, you can see what the potential dividend yield would be in 5 to 15 years at the current rate of 2.08. For example, in 15 years you could expect to receive a yield of 5.66% on your original investment if you bought today. The last column shows the what has happened in the past. For example, people who bought this stock 15 years ago are receiving a current yield of 7.98% on their original investment.
| Div Yd | Years | At IRR | Div Inc | Act Past Inc |
|---|---|---|---|---|
| 4.60% | 5 | 2.08% | 10.86% | 4.62% |
| 5.10% | 10 | 2.08% | 22.91% | 6.04% |
| 5.66% | 15 | 2.08% | 36.26% | 7.98% |
The Dividend Payout Ratios (DPR) are fine. The DPR for EPS for 2021 is 49% with 5 year coverage at 35%. The DPR for Cash Flow per Share for 2021 is 61% with 5 year coverage at 56%. The DPR for Free Cash Flow for 2021 is 90% with 5 year coverage at 69%.
Debt Ratios are fine, but very low liquidity ratio can be a problem. The Long Term Debt/Market Cap Ratio for 2021 is 0.61. The Liquidity Ratio is 0.94. If you add in cash flow after dividends it is still 0.99. The company does have a lot of assets as the Asset/Current Liability Ratio is 30.58. The problem with a very low Liquidity Ratio is that a company could get into difficulties quickly in an economic downturn and have to sell assets at fire sale prices. The Debt Ratio is good at 2.62. Leverage and Debt/Equity Ratios are good at 1.62 and 0.62.
The Total Return per year is shown below for years of 5 to 18 to the end of 2021. 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. |
|---|---|---|---|---|---|
| 2016 | 5 | 2.08% | 8.22% | 4.10% | 4.12% |
| 2011 | 10 | 2.54% | 10.44% | 5.69% | 4.75% |
| 2006 | 15 | 2.28% | 9.05% | 4.34% | 4.71% |
| 2003 | 18 | 4.09% | 13.71% | 7.07% | 6.64% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 7.94, 9.29 and 10.38. The corresponding 10 year ratios are 8.07, 9.27 and 10.22. The corresponding historical ratios are 9.45, 11.43 and 13.24. The current P/E Ratio is 12.42 based on a stock price of $43.22 and EPS estimate for 2022 of $2.17. The current ratio is above the 10 year high median ratio. This stock price testing suggests that the stock price is relatively expensive.
Because this is a REIT, we need to look at the Price/Adjusted Fund from Operations Ratios. The 5 year P/AFFO Ratios are 20.99, 23.67 and 26.57. The corresponding 10 year ratios are 17.66, 20.06 and 22.68. The current P/AFFO Ratio is 20.10 based on AFFO estimate for 2022 of $2.15 and a stock price of $43.22. This ratio is between the median and high of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
Because this is a REIT, we need to look at the Price/Fund from Operations Ratios. The 5 year P/FFO Ratios are 15.67, 19.56 and 20.94. The corresponding 10 year ratios are 15.05, 16.87 and 19.08. The current P/AFFO Ratio is 17.29 based on FFO estimate for 2022 of $2.50 and a stock price of $43.22. This ratio is between the median and high of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a Graham Price of $53.19. The 10 year low, median, and high median Price/Graham Price Ratios are 0.77, 0.90 and 0.77. The current P/GP Ratio is 0.81 based on a stock price of $43.22. The current ratio is between the low and median of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median Price/Book Value per Share Ratio of 1.03. The current P/B Ratio is 0.86 based on a Book Value of $6426M, Book Value per Share of $50.30 and a stock price of $43.22. The current ratio is 17% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median Price/Cash Flow per Share Ratio of 17.89. The current P/CF Ratio is 22.90 based on last 12 months Cash Flow per Share of $1.89, Cash Flow of $241M and a stock price of $43.22. The current ratio is 28% 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 4.71%. The current dividend yield is 4.05% based on dividends of $1.7455 and a stock price of $43.22. The current dividend yield is 14% below the historical median dividend 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 4.05%. The current dividend yield is 4.05% based on dividends of $1.7455 and a stock price of $43.22. The current dividend yield is at the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and at the median.
The 10 year median Price/Sales (Revenue) Ratio is 8.10. The current P/S Ratio is 8.93 based on a stock price of $43.22, Revenue estimate for 2022 of $627M and Revenue per Share of $4.91. The current ratio is 9% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
Results of stock price testing is that the stock price is probably reasonable and around the median or above it. The dividend yield testing is showing the stock price as around the median and above it. The P/S Ratio testing is showing the stock price as above the median. Most the of the testing is showing the stock price as reasonable and above or below the median.
When I look at analysts’ recommendations, I find Strong Buy (3), Buy (8) and Hold (2). The consensus would be a Buy. The 12 month stock price consensus is $50.69. This implies a total return of 20.64% with 16.59% from capital gains and 4.05% from dividends based on a stock price of $43.22.
When I looked at analysts’ recommendations last year, I found Strong Buy (3), Buy (7) and Hold (2). The consensus was a Buy. The 12 month stock price consensus was $45.23. This implies a total return of 26.87%, with 22.28% from capital gains and 4.60% from dividends based on a stock price of $39.66. What happened was an ending stock price of $43.22 and so a total return of 12.14% with 8.08% from capital gains and 4.06% from dividends based on a stock price of $39.99. Last year I thought the stock price was reasonable.
The most recent recommendation on Stock Chase is a hold. Adam Othman on Motley Fool thinks this is a great REIT at an attractive price. Tony Dong on Motley Fool thinks REITs are a great way of owning Real Estate without the hassle. The company reports on Newswire their fourth quarterly results. A report from Simply Wall Street on Yahoo Finance looks at insider buying.
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 Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF) ... learn more. The next stock I will write about will be Intact Financial Corp (TSX-IFC, OTC-IFCZF) ... learn more on Friday, February 18, 2022 around 5 pm. Tomorrow on my other blog I will write about Family and Friendship .... learn more on Thursday, February 17, 2022 around 5 pm.
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