Is it a good company at a reasonable price? This is a reasonable REIT to buy and I would think you would buy it for diversification. It is currently cheap. The total returns to 2022 are low because the stock price is quite cheap. In past periods, it has down well for shareholders. Below is the total return to 2019. It has fallen on hard times because they are into Office real estate. It is, of course, a risk to buy a company when it is down.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2014 | 5 | 2.51% | 10.43% | 6.82% | 3.61% |
| 2009 | 10 | 1.92% | 15.45% | 10.41% | 5.04% |
| 2004 | 15 | 2.90% | 15.23% | 9.26% | 5.98% |
| 2003 | 16 | 4.21% | 15.26% | 9.14% | 6.12% |
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 the stock price on this REIT has fallen a lot over the past few years. Change in stock price year over year from 2020 (-27.35%), 2021 (16.18%), 2020 (-41.75%) and 2023 (15.39%). The stock price was $52.07 in 2019 and it is now $29.54, a drop of 43%. However, over the past year there has been a lot of insiders buying. Net insider buying is 0.05% where normal would be 0.01%.
If you had invested in this company in December 2012, for $1,023.00 you would have bought 31 shares at $33.00 per share. In December 2022, after 10 years you would have received $483.05 in dividends. The stock would be worth $793.60. Your total return would have been $1,276.65.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $33.00 | $1,023.00 | 31 | 10 | $483.05 | $793.60 | $1,276.65 |
The dividend yields are good with dividend growth low. The current dividend yield is good (5% and 6% ranges) at 6.09%. The 5, 10 and historical median dividend yields are moderate (2% to 4% ranges) at 3.68%, 4.05% and 4.72%. The dividend growth is low (below 8% per year) with growth at 2.7% per year over the past 5 years. The last dividend increase was in 2023 and it was for 2.9%.
The Dividend Payout Ratios (DPR) are fine for AFFO and FFO which are the important ones. The DPR for EPS for 2022 is 50% with 5 year coverage at 37%. The DPR for Funds from Operations (FFO) for 2022 is 72% with 5 year coverage also at 72%. The DPR for Adjusted Funds from Operations (AFFO) for 2022 is 80% with 5 year coverage at 83%. The DPR for Cash Flow per Share (CFPS) for 2022 is 56% with 5 year coverage at 56%. The DPR for Free Cash Flow (FCF) for 2022 is 67% with 5 year coverage at 69%.
Debt Ratios are mostly fine, but debt is high. The Long Term Debt/Market Cap for 2022 is too high at 1.18, but is better now at 1.02. Debt has been increasing. The Liquidity Ratio for 2022 is good at 2.20. The Debt Ratio for 2022 is good at 2.49. The Leverage and Debt/Equity Ratios are good at 1.67 and 0.67.
The Total Return per year is shown below for years of 5 to 19 to the end of 2022. 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. |
|---|---|---|---|---|---|
| 2017 | 5 | 2.67% | -4.67% | -9.46% | 4.79% |
| 2012 | 10 | 2.53% | 2.72% | -2.51% | 5.22% |
| 2007 | 15 | 2.25% | 7.81% | 1.41% | 6.39% |
| 2003 | 19 | 4.02% | 11.81% | 3.69% | 8.11% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 7.76, 10.58, and 13.24. The corresponding 10 year ratios are 8.07, 9.94 and 11.49. The corresponding historical ratios are 9.10, 11.23 and 13.60. The current P/E Ratio is 13.44 based on a stock price of $28.90 and EPS estimate for 2023 of $2.15. The current ratio is above the high ratio of the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I also have Funds from Operations (FFO) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 14.86, 19.56 and 20.94. The corresponding 10 year ratios are 15.05, 16.87 and 19.50. The current P/FFO Ratio is 11.61 based on FFO estimate for 2023 of $2.49 and a stock price of $28.90. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I also have Adjusted Funds from Operations (AFFO) data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 17.09, 23.09 and 25.35. The corresponding 10 year ratios are 17.31, 19.75 and 22.64. The current P/AFFO Ratio is 13.32 based on AFFO estimate for 2023 of $2.17 and a stock price of $28.90. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $55.85 . The 10-year low, median, and high median Price/Graham Price Ratios are 0.77, 0.90 and 0.99. The current P/GP Ratio is 0.52 based on a stock price of $28.90. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a 10-year median Price/Book Value per Share Ratio of 1.00. The current ratio is 0.52 based on a stock price of $28.90, Book Value of $7,123M, and Book Value per Share of $55.67. The current ratio is 48% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get a 10-year median Price/Cash Flow per Share Ratio of 17.89. The current ratio is 11.51 based on last 12 months Cash Flow of $321M, Cash Flow per Share of $2.51 and a stock price of $28.90. The current ratio is 36% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 4.72%. The current dividend yield is 6.23% based on a stock price of $28.90 and dividends of $1.80. The current dividend yield is 32% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median dividend yield of 4.05%. The current dividend yield is 6.23% based on a stock price of $28.90 and dividends of $1.80. The current dividend yield is 54% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10-year median Price/Sales (Revenue) Ratio is 8.73. The current P/S Ratio is 5.63 based on Revenue estimate for 2023 of $657M, Revenue per Share of $5.13 and a stock price of $28.90. The current ratio is 35% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price is probably cheap. The dividend yield tests say this and it is confirmed by the P/S Ratio tests. All the other tests say the same thing except for the P/E Ratio test. However, for REITs, FFO and AFFO values are more relevant than EPS values.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (8). The consensus would be a Strong Buy. The 12 month stock price consensus is $35.65. This implies a total return of $29.58% with 6.23% from dividends and 23.36% from capital gains based on a current stock price of $28.90.
Analysts are cautious about this stock on Stock Chase. They do not think that office space will ever be filled like prior to Covid. Stock Chase gives this stock 4 stars out of 5. Jitendra Parashar on Motley Fool likes the high yield and month payment from this stock. Christopher Liew on Motley Fool talks about why you should be REITs. The company put out a press release on TMX about their 2022 results.
Simply Wall Street has a report via Yahoo on this stock. Simply Wall Street gives 4 warnings on this stock of debt is not well covered by operating cash flow; large one-off items impacting financial results; profit margins (32.2%) are lower than last year (69.9%); and shareholders have been diluted in the past year.
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 Canadian Pacific Railway (TSX-CP, NYSE-CP) ... learn more. The next stock I will write about will be Richelieu Hardware Ltd (TSX-RCH, OTC-RHUHF) ... learn more on Wednesday, February 15, 2023 around 5 pm. Tomorrow on my other blog I will write about Banks and Ratios.... learn more on Tuesday, February 14, 2023 around 5 pm.
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