Is it a good company at a reasonable price? The REIT has not really done that well over the years for shareholders. Analysts expect Revenue, AFFO, and FFO to decline by a lot (i.e. 20% – 30%) in 2026. However, they do expect that the share price rises a lot. Simply Wall Street thought it was undervalued and that fits with stock price given by analysts. I think that the reason to buy REITs is the good dividend income. My testing is showing it is reasonable, but I do wonder about making much money with this REIT in the future.
I do not own this stock of H & R Real Estate Trust (TSX-HR.UN, OTC-HRUFF). Before I started blogging, I was following a number of REITs and this is one I had followed. It also used to be on a dividend list I followed.
When I was updating my spreadsheet, I noticed a lot of red on my spreadsheet. A lot is going down including Revenue, FFO, AFFO, EPS, Cash Flow, Book Value, Net Income over the past 5 and 10 years. The item going up is Stock Price. Total Return is up by 8% and 2.6% over the past 5 and 10 years.
If you had invested in this company in December 2015, for $1,002.50 you would have bought 50 shares at $20.05 per share. In December 2025, after 10 years you would have received $690.27 in dividends. The stock would be worth $511.50. Your total return would have been $1,204.77. This would be a total return of 2.59% per year with 6.51% from capital loss and 9.10% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $20.05 | $1,002.50 | 50 | 10 | $690.27 | $511.50 | $1,201.77 |
The current dividend yield is good with dividend growth flat. The dividend yield is good (5% to 6% ranges) at 6.09%. The 5, 10 and historical dividend yields are good at 5.48%, 6.07% and 6.21%. Dividends were cut in 2020, 2021 and 2022 and then in 2023 there was a 9.2% dividend increase. Dividends are still 57% below dividends of 2019. Dividends have been flat over the past few years and analysts expect the same in the future. Dividends are down by 4% per year over the past 5 years.
The Dividend Payout Ratios (DPR) are currently fine. The DPR for 2025 for Earnings per Share (EPS) is awful but not important for a REIT. The DPR for 2025 for Adjusted Funds from Operations (AFFO) is good at 60% with 5 year coverage too high at 141%. The DPR for 2025 for Funds from Operations (FFO) is good at 50% with 5 year coverage too high at 115%. The DPR for 2025 for Cash Flow per Share (CFPS) is good at 39% with 5 year coverage too high at 83%. The DPR for 2025 for Free Cash Flow (FCF) is too high at 90% with 5 year coverage at 71%. FCF for 2025 varies from $29M to $238M and I am using $210M
| Item | Cur | 5 Years |
|---|---|---|
| EPS | -21.22% | 399.28% |
| AFFO | 60.30% | 140.74% |
| FFO | 49.50% | 115.06% |
| CFPS | 38.75% | 82.66% |
| FCF | 89.97% | 71.47% |
Debt Ratios are fine, but Liquidity could improve. The Long Term Debt/Market Cap Ratio for 2025 is high at 1.29 and currently at 1.34. However, we need also to look at the Long Term Debt/Covering Assets Ratio for 2025 which is good at 0.49 and currently at 0.49 because this is a more important ratio for a REIT. The Liquidity Ratio for 2025 is low at 1.00 and 1.00 currently. If you added in Cash Flow after dividends, the ratios are still low at 1.16 and currently at 1.16. The Debt Ratio for 2025 is good at 1.83 and 1.83 currently. The Leverage and Debt/Equity Ratios for 2025 are fine at 2.20 and 1.20 and currently at 2.20 and 1.20.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 1.29 | 1.34 |
| Lg Term R, A | 0.49 | 0.49 |
| Intang/GW | 0.00 | 0.00 |
| Liquidity | 1.00 | 1.00 |
| Liq. + CF | 1.16 | 1.16 |
| Debt Ratio | 1.83 | 1.83 |
| Leverage | 2.20 | 2.20 |
| D/E Ratio | 1.20 | 1.20 |
The Total Return per year is shown below for years of 5 to 29 to the end of 2025. 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. |
|---|---|---|---|---|---|
| 2020 | 5 | -4.00% | 7.98% | -5.10% | 9.63% |
| 2015 | 10 | -5.71% | 2.59% | -6.51% | 9.37% |
| 2010 | 15 | -0.32% | 4.59% | -4.19% | 10.10% |
| 2005 | 20 | -2.73% | 4.41% | -3.52% | 8.77% |
| 2000 | 25 | -1.55% | 10.21% | -0.62% | 12.13% |
| 1996 | 29 | 0.35% | 11.36% | 0.08% | 11.59% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 3.54, 4.24 and 4.94. The corresponding 10 year ratios are 9.09, 9.97 and 10.85. The corresponding historical ratios are 12.16, 12.95 and 17.50. The lower 5 and 10 year ratios are due to earning losses. The current P/E Ratio is 10.84 based on a stock price $9.86 and EPS estimate for 2026 of $0.91. This ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median. However, a P/E Ratio of 10.84 is a rather low P/E Ratio.
I also have Adjusted Funds from Operations (AFFO) data. The 5-year low, median, and high median Price/Adjusted Funds from Operations Ratios are 9.18, 10.86, and 12.55. The corresponding 10 year ratios are 10.17, 12.01 and 14.88. The corresponding historical ratios are 12.63, 13.99 and 15.50. The current P/AFFO Ratio is 13.89 based on a stock price $9.86 and AFFO estimate for 2026 of $0.71. This ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median. I noticed that TD, where I got the AFFO data from expected a 29% drop in AFFO for 2026.
I also have Funds from Operations (FFO) data. The 5-year low, median, and high median Price/Funds from Operations Ratios are 7.53, 8.92 and 10.31. The corresponding 10 year ratios are 8.32, 9.82 and 12.26. The corresponding historical ratios are 9.43, 10.85 and 12.33. The current P/FFO Ratio is 11.88 based on a stock price $9.86 and FFO estimate for 2026 of $0.83. This ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median. I noticed that TD, where I got the FFO data from expected a 31% drop in FFO for 2026.
I get a Graham Price of $17.09 Using FFO in the formula because of earnings losses. The 10-year low, median, and high median Price/Graham Price Ratios are 0.47, 0.56 and 0.68. The current ratio is 0.58 based a stock price of $9.86. This ratio is between the median and high ratios 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 10-year median Price/Book Value per Share Ratio of 0.75. The current ratio is 0.63 based on Book Value of $4,135.7M, Book Value per Share of $15.63 and a stock price of $9.86. The current ratio is 16% 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 12.64. The current ratio is 13.84 based on Cash Flow for the last 12 months of $188.4M, Cash Flow per Share of $0.71 and a stock price of $9.86. 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 an historical median dividend yield of 6.21%. The current dividend yield is 6.09% based on dividends of $0.60 and a stock price of $9.86. The current dividend yield is 2% 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 6.07%. The current dividend yield is 6.09% based on dividends of $0.60 and a stock price of $9.86. The current dividend yield is .2% 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 3.45. The current ratio is 3.49 based on Revenue estimate for 2026 of $748.2M, Revenue per Share of $2.83 and a stock price of $9.86. The current ratio is 1% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median. I noticed that estimate for 2026 is some 24% below revenue for 2025.
Results of stock price testing is that the stock price is could be reasonable. The 10 year median dividend yield test says this. For the P/S Ratio test the difference in ratios from 10 year median to current is just 1%. Most of the testing however is saying that the stock price is reasonable but above the median. Analysts seem to believe that Revenue, AFFO, and FFO will drop this year.
When I look at analysts’ recommendations, I find Strong Buy (3), Buy (2) and Hold (2). The consensus is a Buy. The 12 month stock price consensus is $11.79 with a high of $13.00 and a low of $10.50. The consensus stock price of $11.79 implies a total return of $25.66 with 19.57% from capital gains and $6.09% from dividends. This makes no sense considering Revenue, AFFO and FFO is expected to decline.
Analysts in 2025 on Stock Chase gives this stock a Hold. One thinks it will be bought out. Jitendra Parashar on Motley Fool thought this REIT was appealing because of its dividend. Christopher Liew on Motley Fool thought you should buy for its monthly dividend. The company put out a press release via Newswire about their fourth quarter results for 2025.
Simply Wall Street via Yahoo Finance reviews this stock. They think it is undervalued and that the fair value is $13.86. Simply Wall Street has two warnings of interest payments are not well covered by earnings; and dividend of 7.67% is not well covered by free cash flows.
H&R Real Estate Investment Trust is a real estate investment trust principally involved in the ownership of properties in Canada and the U.S. The REIT has four reportable operating segments- Residential, Industrial, Office and Retail, in two geographical locations -Canada and the United States. Its web site is here H & R Real Estate Trust.
The last stock I wrote about was about was Emera Inc (TSX-EMA, OTC-EMRA) ... learn more. The next stock I will write about will be Enbridge Inc (TSX-ENB, NYSE-ENB) ... learn more on Wednesday, April 1, 2026 around 5 pm. Tomorrow on my other blog I will write about Dividend Monster Portfolio.... learn more on Tuesday, March 31, 2026 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. 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.
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