Is it a good company at a reasonable price? The dividend yield is very high at over 10%. No one seems to think that it will go bankrupt, but it does have problems because it has office real estate. On the other hand, the stock price is relatively cheap.
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 they had an earning loss in 2023 of $3.94 per share. The reason seems to be the write off of properties being held for sale. Since December 2021, the stock price has fallen 59%. The stock price was down 21% last year and is down 10% year to date.
If you had invested in this company in December 2013, for $1,015.56 you would have bought 31 shares at $32.76 per share. In December 2023, after 10 years you would have received $495.01 in dividends. The stock would be worth $625.58. Your total return would have been $1,120.59. This would be a total return of 1.23% per year with 4.73% from capital loss and 5.96% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $32.76 | $1,015.56 | 31 | 10 | $495.01 | $625.58 | $1,120.59 |
The current dividend yield is high with dividend growth low. The current dividend yield is High (7% and over) at 9.92%. The 5, 10 and historical median dividend yields are moderate (2% to 4% ranges) at 4.15%, 4.05% and 4.74%. The dividend growth is low (below 8% per year) at 2.9% 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 mostly fine, but some could be improved upon. The DPR for 2023 for Earnings per Share (EPS) is negative with a with 5 year coverage fine at 66%. The DPR for 2023 for Adjusted Funds from Operations (AFFO) is fine at 82% with 5 year coverage at 82%. The DPR for 2023 for Funds from Operations (FFO) is a little high at 55% with 5 year coverage at 57%. The DPR for 2023 for Free Cash Flow (FCF) is high at 72% with 5 year coverage at 71%. The important DPRs are the AFFO and FFO ones.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | -58.96% | 66.38% |
| AFFO | 82.49% | 81.95% |
| FFO | 75.45% | 71.99% |
| CFPS | 54.90% | 56.61% |
| FCF | 72.03% | 71.42% |
Debt Ratios are fine except for the Liquidity Ratio and this too low. The Long Term Debt/Covering Assets Ratio for 2023 is good at 0.37. The Long Term Debt/Market Cap Ratio for 2023 is high at 1.36, but the Long Term Debt/Covering Assets Ratio is more important. The Liquidity Ratio for 2023 is a really low at 0.73. If you added in Cash Flow after dividends, the ratios are still low at 0.84. If you add back the current portion of the long term debt, it gets just to 1.01 and still very low. The Debt Ratio for 2023 is good at 2.37. The Leverage and Debt/Equity Ratios for 2023 are good at 1.73 and 0.73.
| Type | Year End |
|---|---|
| Lg Term R A | 0.37 |
| Lg Term R | 1.36 |
| Intang/GW | 0.00 |
| Liquidity | 0.73 |
| Liq. + CF | 0.84 |
| Liq. + CF +Dd | 1.01 |
| Debt Ratio | 2.37 |
| Leverage | 1.73 |
| D/E Ratio | 0.73 |
The Total Return per year is shown below for years of 5 to 20 to the end of 2023. 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. |
|---|---|---|---|---|---|
| 2018 | 5 | 2.86% | -9.26% | -14.56% | 4.79% |
| 2013 | 10 | 2.45% | 1.23% | -4.73% | 5.22% |
| 2008 | 15 | 2.15% | 13.08% | 3.27% | 6.39% |
| 2003 | 20 | 3.97% | 11.17% | 2.28% | 8.11% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 7.94, 1.43 and 13.24. The corresponding 10 year ratios are 8.07, 10.16 and 11.49. The corresponding historical ratios are 9.14, 11.43 and 13.24. The Current P/E Ratio is 8.83 based on a Stock Price of $17.75 and EPS estimate for 2024 of $2.01. The current ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I also have Adjusted Funds from Operations (AFFO) data. The 5-year low, median, and high median Price/ Adjusted Funds from Operations Ratios are 16.04, 19.57 and 22.36. The corresponding 10 year ratios are 17.08, 19.75 and 22.64. The current P/AFFO Ratio is 9.20 based on a stock price of $17.75 and AFFO estimate for 2024 of $1.96. The current ratio is lower than the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I also have Funds from Operations (FFO) data. The 5-year low, median, and high median Price/ Funds from Operations Ratios are 13.91, 17.01 and 19.96. The corresponding 10 year ratios are 14.55, 16.87 and 19.50. The current P/FFO Ratio is 7.65 based on a stock price of $17.75 and FFO estimate for 2024 of $2.32. The current ratio is lower than 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 $50.03. The 10-year low, median, and high median Price/Graham Price Ratios are 0.74, 0.89 and 0.99. The current P/GP Ratio is 0.35 based on a stock price of $17.75. The current ratio is below the low ratios 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 0.98. The current ratio is 0.37 based on a Book Value of $6,135M, Book Value per Share of $47.95 and a stock price of $17.75. The current ratio is 62% 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 17.04. The current ratio is 7.07 based on Cash Flow for the last 12 months of $321M, Cash Flow per Share of $2.51 and a stock price of $17.75. the current ratio is 59% 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 4.74%. The current dividend yield is 10.14% based dividends of $1.80 and a stock price of $17.75. The current dividend yield is 114% 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 10.14% based dividends of $1.80 and a stock price of $17.75. The current dividend yield is 151% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10-year median Price/Sales (Revenue) Ratio is 8.72. The current P/S Ratio is 4.06 based on Revenue estimate for 2024 of $559M, Revenue per Share of $4.37 and a stock price of $17.75. The current ratio is 53% 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 the stock price is relatively cheap. The P/S Ratio test confirms this. Most of the other testing is saying the same thing.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (5) and Hold (3). The consensus is a Buy. The 12 month stock price consensus is $21.15 with a high of $24.00 and low of $19.50. The consensus stock price of $21.15 implies a total return of 29.30%, with 19.15% from capital gains and 10.14% from dividends.
The analysts on Stock Chase do like this stock. It is on the Aristocrat stock list. Stock Chase gives this stock 4 stars out of 5. Amy Legate-Wolfe on Motley Fool says buy for its passive income. Aditya Raghunath on Motley Fool says buy because it is beaten down and has a tasty dividend. The company put out a press release via Newswire about their fourth quarter results for 2023.
Simply Wall Street gives this stock 3 and one half stars out of 5. They have one warning of debt is not well covered by operating cash flow.
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 Cogeco Communications Inc (TSX-CCA, OTC- CGEAF) ... learn more. The next stock I will write about will be ARC Resources Ltd (TSX-ARX, OTC-AETUF) ... learn more on Wednesday, February 14, 2024 around 5 pm. TTomorrow on my other blog I will write about Dividend Stocks for 2024.... learn more on Tuesday, February 13, 2024 around 5 pm..
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