Is it a good company at a reasonable price? I have some investments in REITs. I do think of them as defensive stocks. REITs generally produced good dividends and little in the way of capital gains. I also bought some REITs for diversification. This REIT is not that different from the REITs I bought as most have had a hard time producing capital gains recently. Possibly the best you can do when purchasing a stock is buy at a reasonable price and this stock seems to be currently selling at a reasonable price.
I do not own this stock of First Capital REIT (TSX-FCR.UN, OTC-FCXXF). Myowneradvistor.com asked me to look into this stock. 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 they now have 4 ways of measuring funds or cash flow from Operations. They used Fund from Operations (FFO), Adjusted Funds from Operations (AFFO) and Adjusted Cash Flow from Operations (ACFO) in the past. This year they added Operating Funds from Operations (OFFO). Most REITs used just AFFO and FFO.
If you had invested in this company in December 2014, for $1,007.64 you would have bought 54 shares at $18.66 per share. In December 2024, after 10 years you would have received $426.36 in dividends. The stock would be worth $9.15.84. Your total return would have been $1,342.20. This would be a total return of 3.48% per year with 0.95% from capital loss and 4.43% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $18.66 | $1,007.64 | 54 | 10 | $426.36 | $915.84 | $1,342.20 |
The current dividend yield is moderate with dividend growth inconsistent. The current dividend yield is moderate (2% to 4%) at 4.58%. The 5 year median dividend yield is good (5% go 6% ranges) at 5.18%. The 10 year and historical median dividend yields are moderate at 4.36% and 4.95%. The dividends have grown at 0.09% per year over the past 5 years. Dividends were cut 95% in 2021 and then increased 100% in 2022. So, dividends were basically back where they started. The last increase was in 2025 and it was for 2.8%.
The Dividend Payout Ratios (DPR) are fine. The DPR for 2024 for Earnings per Share (EPS) is too high at 98% with 5 year coverage at 223%. The DPR for 2024 for Adjusted Funds from Operations (AFFO) is fine at 80% with 5 year coverage at 72%. The DPR for 2024 for Funds from Operations (FFO) is good at 64% with 5 year coverage at 61%. The DPR for 2024 for Cash Flow per Share (CFPS) is fine at 41% with 5 year coverage at 38%. The DPR for 2024 for Free Cash Flow (FCF) is fine at 77% with 5 year coverage at 64%. The range of FCF for 2024 is from $110M to $239M. (I am using the latter one.)
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 98.01% | 222.79% |
| AFFO | 80.31% | 72.09% |
| FFO | 64.00% | 61.46% |
| CFPS | 41.20% | 38.05% |
| FCF | 76.63% | 63.65% |
Debt Ratios are mostly fine, but Liquidity Ratio needs improving. The Long Term Debt/Market Cap Ratio for 2024 are high at 0.98 and currently at 0.82. However, we need also to look at the Long Term Debt/Covering Assets Ratio for 2024 which is good at 0.42 and currently at 0.39 because this is a more important ratio for a REIT. The Liquidity Ratio for 2024 is too low at 0.92 and 0.66 currently. If you added in Cash Flow after dividends, the ratios are still too low at 0.98 and currently at 0.69. If you add back the current portion of the debt, the ratios are fine at 3.12 and 2.61. The Debt Ratio for 2024 is good at 1.78 and 1.81 currently. The Leverage and Debt/Equity Ratios for 2024 are fine at 2.29 and 1.29 and currently at 2.24 and 1.24.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.98 | 0.82 |
| Lg Term A | 0.42 | 0.39 |
| Intang/GW | 0.00 | 0.00 |
| Liquidity | 0.92 | 0.66 |
| Liq. + CF | 0.98 | 0.69 |
| Liq. CF xDB | 3.12 | 2.61 |
| Debt Ratio | 1.78 | 1.81 |
| Leverage | 2.29 | 2.24 |
| D/E Ratio | 1.29 | 1.24 |
The Total Return per year is shown below for years of 5 to 30 to the end of 2024. 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. |
|---|---|---|---|---|---|
| 2019 | 5 | 0.09% | -0.32% | -4.06% | 3.74% |
| 2014 | 10 | 0.22% | 3.48% | -0.95% | 4.43% |
| 2009 | 15 | 0.51% | 6.98% | 1.51% | 5.46% |
| 2004 | 20 | 0.92% | 7.99% | 1.84% | 6.15% |
| 1999 | 25 | 1.75% | 10.92% | 3.25% | 7.67% |
| 1994 | 30 | 3.25% | 12.16% | 3.74% | 8.41% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 6.48, 7.83 and 9.17. The corresponding 10 year ratios are 11.01, 12.41 and 13.81. The corresponding historical ratios are 15.40, 17.11 and 18.81. The current P/E Ratio is 14.92 based on a stock price of $19.40 and EPS estimate for 2025 of $1.30. 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. A ratio is 14.92 is not a particularly high ratio.
I also have Funds from Operations (FFO) data. The 5-year low, median, and high median Price/ Funds from Operations Ratios are 11.15, 13.63 and 16.18. The corresponding 10 year ratios are 12.87, 16.08 and 17.99. The corresponding historical ratios are 13.02, 15.36 and 17.16. The current P/E Ratio is 14.92 based on a stock price of $19.40 and FFO estimate for 2025 of $1.30. The current ratio is between the low and median ratios of the 10 year median ratio. 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 13.35, 16.12 and 18.89. The corresponding 10 year ratios are 14.72, 17.95 and 19.81. The corresponding historical ratios are 16.45, 18.02 and 19.66. The current P/E Ratio is 14.66 based on a stock price of $19.40 and AFFO estimate for 2025 of $1.18. The current ratio is between the low and median ratios of the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $23.52. The 10-year low, median, and high median Price/Graham Price Ratios are 0.70, 0.82 and 0.94. The current ratio is 0.82 based on a stock price of $19.40. The current ratio is at the median ratio of the 10 year median ratios. 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 0.93. The current ratio is 1.03 based on a Book Value of $4,019.3M, Book Value per Share of $18.92 and a stock price of $19.40. The current ratio is 10% 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 16.70. The current ratio is 18.89 based on a stock price of $19.40, Cash Flow for the last 12 months of $218.2M and Cash Flow per Share of $1.03. The current ratio is 13% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get an historical median dividend yield of 4.95%. The current dividend yield is 4.58% based on a stock price of $19.40 and dividends of $0.888. The current dividend yield is 8% 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 4.36%. The current dividend yield is 4.58% based on a stock price of $19.40 and dividends of $0.888. The current dividend yield is 5% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The 10-year median Price/Sales (Revenue) Ratio is 5.73. The current ratio is 5.54 based on Revenue estimate for 2025 of $744.4M, Revenue per Share of $3.50 and a stock price of $19.40. The current ratio is 3% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
Results of stock price testing is that the stock price is probably reasonable. The 10 year dividend yield test says this. It is confirmed by the P/S Ratio test. Testing results go from reasonable to expensive.
When I look at analysts’ recommendations, I find Strong Buy (4), Buy (4), Hold (1) and Underperform (1). The 12 month stock price consensus is $21.48 with a high of $22.50 and low of $19.00. The consensus stock price of $21.48 implies a total return of 15.30% with 10.72% from capital gains and 4.58% from dividends based on a currently stock price of $19.40.
There a few entries for 2025 on Stock Chase. They are all buys. One analyst says to buy as a defensive stock. Robin Brown on Motley Fool likes this REIT because it operates grocery-anchored retail properties. Kevin Bowen on Motley Fool likes this stock’s yield and that it is using grocers as anchor tenants. The company put out a press release via Newswire about their fourth quarter of 2024. The company put out a press release via Newswire about their third quarter of 2025 results.
Simply Wall Street via Yahoo Finance reviews this stock and thinks it is undervalued. Simply Wall Street has 3 warnings on this stock of earnings have declined by 7.9% per year over past 5 years; interest payments are not well covered by earnings; and unstable dividend track record.
First Capital REIT is a developer, owner, and operator of grocery-anchored, open-air centers in neighborhoods in Canada's populated centers. The company's focus is on creating thriving neighborhoods that create value for businesses, residents, communities, and investors. Its web site is here First Capital REIT.
The last stock I wrote about was about was FirstService Corp (TSX-FSV, NASDAQ-FSV) ... learn more. The next stock I will write about will be Stella-Jones Inc (TSX-SJ, OTC-STLJF) ... learn more on Friday, November 21, 2025 around 5 pm. Tomorrow on my other blog I will write about Overlooked Dividend Stocks.... learn more on Thursday, November 20, 2025 around 5 pm.
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