Chesapeake Lodging Trust Valuation – July 2018 $CHSP

Company Profile (excerpt from Reuters): Chesapeake Lodging Trust, incorporated on June 12, 2009, is a real estate investment trust. The Company is focused on investments primarily in upper-upscale hotels in various business and convention markets and, on a selective basis, select-service hotels in urban settings or other locations in the United States. The Company operates through the hotel ownership segment. The Company conducts its operations primarily though Chesapeake Lodging, L.P., its operating partnership (the Operating Partnership).

CHSP Chart

CHSP data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of CHSP – July 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $1,889,031,633 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.29 Fail
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 1352.17% Pass
6. Moderate PEmg Ratio PEmg < 20 28.62 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.80 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.29 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 43.13 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $1.09
MG Growth Estimate 8.28%
MG Value $27.24
Opinion Overvalued
MG Grade D+
MG Value based on 3% Growth $15.77
MG Value based on 0% Growth $9.24
Market Implied Growth Rate 10.06%
Current Price $31.12
% of Intrinsic Value 114.23%

Chesapeake Lodging Trust does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the small size, low current ratio, insufficient earnings stability over the last ten years, and the poor dividend history, and the high PEmg ratio. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $0.7 in 2014 to an estimated $1.09 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 10.06% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Chesapeake Lodging Trust revealed the company was trading above its Graham Number of $20.81. The company pays a dividend of $1.6 per share, for a yield of 5.1%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 28.62, which was below the industry average of 49.54, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-14.13.

Chesapeake Lodging Trust scores quite poorly in the ModernGraham grading system, with an overall grade of D+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$14.13
Graham Number $20.81
PEmg 28.62
Current Ratio 1.29
PB Ratio 1.80
Current Dividend $1.60
Dividend Yield 5.14%
Number of Consecutive Years of Dividend Growth 8

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2018
Total Current Assets $85,249,000
Total Current Liabilities $65,968,000
Long-Term Debt $831,684,000
Total Assets $1,964,199,000
Intangible Assets $35,112,000
Total Liabilities $929,090,000
Shares Outstanding (Diluted Average) 59,719,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.10
Dec2017 $1.11
Dec2016 $1.13
Dec2015 $0.99
Dec2014 $1.00
Dec2013 $0.75
Dec2012 $0.66
Dec2011 $0.30
Dec2010 -$0.07

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.09
Dec2017 $1.05
Dec2016 $0.98
Dec2015 $0.85
Dec2014 $0.70
Dec2013 $0.48
Dec2012 $0.29
Dec2011 $0.08
Dec2010 -$0.02

Recommended Reading:

Other ModernGraham posts about the company

10 Best Dividend Paying Stocks for the Enterprising Investor – February 2017
10 Stocks for Using A Benjamin Graham Value Investing Strategy – February 2017
10 Best Dividend Paying Stocks for the Enterprising Investor – January 2017
8 Best Stocks for Value Investors This Week – 12/27/16
Chesapeake Lodging Trust Valuation – December 2016 $CHSP

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Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Chesapeake Lodging Trust Valuation – December 2016 $CHSP

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – December 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Chesapeake Lodging Trust (CHSP) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Chesapeake Lodging Trust (the Trust) is a self-advised real estate investment trust (REIT). The Trust is focused on investments primarily in upper-upscale hotels in business and convention markets and, on service hotels in urban settings or locations in the United States. The Trust owns over 20 hotels with over 6,700 rooms in approximately nine states and the District of Columbia. The Trust’s hotel portfolio includes Le Meridien San Francisco, Hyatt Regency Boston, Hilton Checkers Los Angeles, Hotel Indigo San Diego Gaslamp Quarter, Hyatt Santa Barbara, JW Marriott San Francisco Union Square, W New Orleans-French Quarter and Denver Marriott City Center, among others. The Trust’s hotels are located in Los Angeles, San Francisco, Washington, New York, Denver, Newton and Boston, among others. The Trust’s operations are conducted through Chesapeake Lodging, L.P. (the Operating Partnership). The Operating Partnership leases its hotels to taxable REIT subsidiaries.

CHSP Chart

CHSP data by YCharts

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To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Recent valuations of the components of the Dow Jones Industrial Average are available for free members, including this one of Microsoft Corporation.  In addition, here is a post detailing what can be found within each individual company’s valuation.

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Downloadable PDF version of this valuation:

ModernGraham Valuation of CHSP – December 2016

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $1,599,322,482 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.08 Pass
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 10233.33% Pass
6. Moderate PEmg Ratio PEmg < 20 27.29 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.31 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.08 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 10.18 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

EPSmg $0.98
MG Growth Estimate 15.00%
MG Value $37.65
Opinion Undervalued
MG Grade B
MG Value based on 3% Growth $14.18
MG Value based on 0% Growth $8.31
Market Implied Growth Rate 9.40%
Current Price $26.69
% of Intrinsic Value 70.88%

Chesapeake Lodging Trust is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the small size, insufficient earnings stability over the last ten years, the poor dividend history, and the high PEmg ratio. The Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $0.29 in 2012 to an estimated $0.98 for 2016. This level of demonstrated earnings growth outpaces the market’s implied estimate of 9.4% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Chesapeake Lodging Trust revealed the company was trading above its Graham Number of $22.35. The company pays a dividend of $1.6 per share, for a yield of 6%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 27.29, which was below the industry average of 31.91, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-12.24.

Chesapeake Lodging Trust performs fairly well in the ModernGraham grading system, scoring a B.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$12.24
Graham Number $22.35
PEmg 27.29
Current Ratio 2.08
PB Ratio 1.31
Current Dividend $1.60
Dividend Yield 5.99%
Number of Consecutive Years of Dividend Growth 7

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Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2016
Total Current Assets $142,166,000
Total Current Liabilities $68,498,000
Long-Term Debt $749,979,000
Total Assets $2,065,426,000
Intangible Assets $35,980,000
Total Liabilities $863,630,000
Shares Outstanding (Diluted Average) 58,928,000

Earnings Per Share History

Next Fiscal Year Estimate $1.11
Dec2015 $0.99
Dec2014 $1.00
Dec2013 $0.75
Dec2012 $0.66
Dec2011 $0.30
Dec2010 -$0.07

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $0.98
Dec2015 $0.85
Dec2014 $0.70
Dec2013 $0.48
Dec2012 $0.29
Dec2011 $0.08
Dec2010 -$0.02

Recommended Reading:

Other ModernGraham posts about the company

None.  This is the first time ModernGraham has covered the company.

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American Campus Communities Valuation – November 2016 $ACC
Ventas Inc Valuation – August 2016 $VTR
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Starwood Property Trust Inc Valuation – August 2016 $STWD
Kimco Realty Corp Valuation – August 2016 $KIM
Equity Residential Valuation – August 2016 $EQR

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Uniti Group Inc Valuation – August 2018 $UNIT

Company Profile (excerpt from Reuters): Uniti Group Inc., formerly Communications Sales & Leasing, Inc., incorporated on September 04, 2014, is an internally managed real estate investment trust (REIT) engaged in the acquisition and construction of infrastructure in the communications industry. The Company focuses on acquiring and constructing fiber optic broadband networks, wireless communications towers, copper and coaxial broadband networks and data centers. The Company operates through four segments: Leasing, Fiber Infrastructure, Towers and Consumer Competitive Local Exchange Carrier (Consumer CLEC). The Leasing segment includes Uniti Leasing. The Fiber Infrastructure segment represents the operations of the Uniti Fiber business. The Towers segment includes Uniti Towers and its ground lease investments. The Consumer CLEC segment includes Talk America. As of Juy 3, 2017, the Company and its subsidiaries owned approximately 88,100 fiber network route miles, representing approximately 4.8 million fiber strand miles and approximately 231,900 route miles of copper cable lines across 32 states.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of UNIT – August 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $3,615,638,673 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.16 Fail
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -633.33% Fail
6. Moderate PEmg Ratio PEmg < 20 3,087.00 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 -2.79 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.16 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -6.38 Fail
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Fail

 

Stage 2: Determination of Intrinsic Value

EPSmg $0.01
MG Growth Estimate -4.25%
MG Value $0.00
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth $0.10
MG Value based on 0% Growth $0.06
Market Implied Growth Rate 1539.25%
Current Price $20.58
% of Intrinsic Value N/A

Uniti Group Inc does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings stability or growth over the last ten years, and the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the current assets, and the lack of earnings stability or growth over the last five years. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after seeing its EPSmg (normalized earnings) decline from $0.23 in 2014 to an estimated $0.01 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 1539.25% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Uniti Group Inc revealed the company was trading above its Graham Number of $0. The company pays a dividend of $2.4 per share, for a yield of 11.7%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 3087, which was above the industry average of 47.15. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-32.1.

Uniti Group Inc scores quite poorly in the ModernGraham grading system, with an overall grade of D.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$32.10
Graham Number $0.00
PEmg 3,087.00
Current Ratio 0.16
PB Ratio -2.79
Current Dividend $2.40
Dividend Yield 11.66%
Number of Consecutive Years of Dividend Growth 2

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2018
Total Current Assets $143,137,000
Total Current Liabilities $876,338,000
Long-Term Debt $4,679,304,000
Total Assets $4,471,658,000
Intangible Assets $1,097,605,000
Total Liabilities $5,761,451,000
Shares Outstanding (Diluted Average) 175,011,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.01
Dec2017 -$0.13
Dec2016 -$0.04
Dec2015 $0.00
Dec2014 $0.69

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.01
Dec2017 $0.04
Dec2016 $0.12
Dec2015 $0.18
Dec2014 $0.23

Recommended Reading:

Other ModernGraham posts about the company

Communications Sales & Leasing Valuation – Initial Coverage $CSAL

Other ModernGraham posts about related companies

Crombie Real Estate Investment Trust Valuation – August 2018 $TSE-CRR.UN
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Camden Property Trust Valuation – August 2018 $CPT
Senior Housing Properties Trust Valuation – August 2018 $SNH
CoreSite Realty Corp Valuation – August 2018 $COR
Tanger Factory Outlet Centers Inc Valuation – July 2018 $SKT
Capstead Mortgage Corp Valuation – July 2018 $CMO
Mack-Cali Realty Corp Valuation – July 2018 $CLI
Chesapeake Lodging Trust Valuation – July 2018 $CHSP

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Kite Realty Group Trust Valuation – August 2018 $KRG

Company Profile (excerpt from Reuters): Kite Realty Group Trust, incorporated on March 29, 2004, is a real estate investment trust. The Company, through its subsidiary, Kite Realty Group, L.P., owns interests in various operating subsidiaries and joint ventures engaged in the ownership, operation, acquisition, development and redevelopment of neighborhood and community shopping centers in selected markets in the United States. As of December 31, 2016, the Company owned interests in 108 operating retail properties totaling approximately 21.4 million square feet of gross leasable area (including approximately 6.3 million square feet of non-owned anchor space) located in 20 states. As of December 31, 2016, the Company had an interest in two development projects under construction. In addition to its development projects, as of December 31, 2016, the Company had nine redevelopment projects. As of December 31, 2016, the Company owned interests in one office operating property and an associated parking garage.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of KRG – August 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $1,443,090,736 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.09 Pass
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -91.67% Fail
6. Moderate PEmg Ratio PEmg < 20 -767.65 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.97 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.09 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 14.19 Fail
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg -$0.02
MG Growth Estimate 14.14%
MG Value $0.00
Opinion Overvalued
MG Grade D+
MG Value based on 3% Growth -$0.33
MG Value based on 0% Growth -$0.19
Market Implied Growth Rate -388.07%
Current Price $17.40
% of Intrinsic Value N/A

Kite Realty Group Trust does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the small size, insufficient earnings stability or growth over the last ten years, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the net current assets, and the lack of earnings stability over the last five years. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $-0.39 in 2014 to an estimated $-0.02 for 2018. This level of negative earnings does not support a positive valuation.As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Kite Realty Group Trust revealed the company was trading above its Graham Number of $0. The company pays a dividend of $1.23 per share, for a yield of 7%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was -767.65, which was below the industry average of 47.15, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-19.01.

Kite Realty Group Trust scores quite poorly in the ModernGraham grading system, with an overall grade of D+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$19.01
Graham Number $0.00
PEmg -767.65
Current Ratio 2.09
PB Ratio 0.97
Current Dividend $1.23
Dividend Yield 7.04%
Number of Consecutive Years of Dividend Growth 4

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2018
Total Current Assets $211,482,000
Total Current Liabilities $101,180,000
Long-Term Debt $1,565,429,000
Total Assets $3,302,197,000
Intangible Assets $0
Total Liabilities $1,802,067,000
Shares Outstanding (Diluted Average) 83,673,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate -$0.21
Dec2017 $0.14
Dec2016 $0.01
Dec2015 $0.18
Dec2014 -$0.24
Dec2013 -$0.48
Dec2012 -$0.72
Dec2011 -$0.04
Dec2010 -$0.56
Dec2009 -$0.12
Dec2008 $0.80
Dec2007 $1.84
Dec2006 $1.40
Dec2005 $2.48
Dec2004 -$0.11

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate -$0.02
Dec2017 $0.02
Dec2016 -$0.11
Dec2015 -$0.20
Dec2014 -$0.39
Dec2013 -$0.44
Dec2012 -$0.33
Dec2011 $0.04
Dec2010 $0.28
Dec2009 $0.89
Dec2008 $1.36
Dec2007 $1.47
Dec2006 $1.11
Dec2005 $0.80
Dec2004 -$0.04

Recommended Reading:

Other ModernGraham posts about the company

Kite Realty Group Trust Valuation – Initial Coverage $KRG

Other ModernGraham posts about related companies

Crombie Real Estate Investment Trust Valuation – August 2018 $TSE-CRR.UN
Charles River Laboratories International Inc Valuation – August 2018 $CRL
SmartCentres Real Estate Investment Trust Valuation – August 2018 $TSE-SRU.UN
Camden Property Trust Valuation – August 2018 $CPT
Senior Housing Properties Trust Valuation – August 2018 $SNH
CoreSite Realty Corp Valuation – August 2018 $COR
Tanger Factory Outlet Centers Inc Valuation – July 2018 $SKT
Capstead Mortgage Corp Valuation – July 2018 $CMO
Mack-Cali Realty Corp Valuation – July 2018 $CLI
Chesapeake Lodging Trust Valuation – July 2018 $CHSP

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Kilroy Realty Corp Valuation – August 2018 $KRC

Company Profile (excerpt from Reuters): Kilroy Realty Corporation, incorporated on September 13, 1996, is a real estate investment trust (REIT). The Company operates through the office properties segment. The Company operates in office and mixed-use submarkets along the West Coast. The Company owns, develops, acquires and manages real estate assets, consisting primarily of Class A properties in the coastal regions of Los Angeles, Orange County, San Diego County, the San Francisco Bay Area and Greater Seattle. The Company owns its interests in all of its real estate assets through Kilroy Realty, L.P. (Operating Partnership) and the Kilroy Realty Finance Partnership, L.P. (Finance Partnership).

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of KRC – August 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $7,236,641,007 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.11 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 287.76% Pass
6. Moderate PEmg Ratio PEmg < 20 39.14 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.79 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.11 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.00 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $1.86
MG Growth Estimate 2.61%
MG Value $25.45
Opinion Overvalued
MG Grade D+
MG Value based on 3% Growth $26.91
MG Value based on 0% Growth $15.78
Market Implied Growth Rate 15.32%
Current Price $72.65
% of Intrinsic Value 285.49%

Kilroy Realty Corp does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, high PEmg ratio. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $1.58 in 2014 to an estimated $1.86 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 15.32% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Kilroy Realty Corp revealed the company was trading above its Graham Number of $32.09. The company pays a dividend of $1.65 per share, for a yield of 2.3%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 39.14, which was below the industry average of 47.15, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-29.55.

Kilroy Realty Corp scores quite poorly in the ModernGraham grading system, with an overall grade of D+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$29.55
Graham Number $32.09
PEmg 39.14
Current Ratio 0.11
PB Ratio 1.79
Current Dividend $1.65
Dividend Yield 2.27%
Number of Consecutive Years of Dividend Growth 2

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2018
Total Current Assets $361,215,000
Total Current Liabilities $3,320,911,000
Long-Term Debt $0
Total Assets $7,384,784,000
Intangible Assets $186,649,000
Total Liabilities $3,320,911,000
Shares Outstanding (Diluted Average) 100,151,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.22
Dec2017 $1.51
Dec2016 $2.97
Dec2015 $2.42
Dec2014 $1.95
Dec2013 $0.37
Dec2012 $3.56
Dec2011 $0.87
Dec2010 $0.07
Dec2009 $0.53
Dec2008 $0.91
Dec2007 $3.20
Dec2006 $2.30
Dec2005 $0.84
Dec2004 $1.06
Dec2003 $1.79
Dec2002 $1.39
Dec2001 $1.12
Dec2000 $1.75
Dec1999 $1.44
Dec1998 $1.43

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.86
Dec2017 $2.06
Dec2016 $2.31
Dec2015 $1.93
Dec2014 $1.58
Dec2013 $1.29
Dec2012 $1.56
Dec2011 $0.75
Dec2010 $0.93
Dec2009 $1.42
Dec2008 $1.80
Dec2007 $2.11
Dec2006 $1.53
Dec2005 $1.18
Dec2004 $1.37
Dec2003 $1.52
Dec2002 $1.40

Recommended Reading:

Other ModernGraham posts about the company

Kilroy Realty Corp Valuation – Initial Coverage $KRC

Other ModernGraham posts about related companies

Crombie Real Estate Investment Trust Valuation – August 2018 $TSE-CRR.UN
Charles River Laboratories International Inc Valuation – August 2018 $CRL
SmartCentres Real Estate Investment Trust Valuation – August 2018 $TSE-SRU.UN
Camden Property Trust Valuation – August 2018 $CPT
Senior Housing Properties Trust Valuation – August 2018 $SNH
CoreSite Realty Corp Valuation – August 2018 $COR
Tanger Factory Outlet Centers Inc Valuation – July 2018 $SKT
Capstead Mortgage Corp Valuation – July 2018 $CMO
Mack-Cali Realty Corp Valuation – July 2018 $CLI
Chesapeake Lodging Trust Valuation – July 2018 $CHSP

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Crombie Real Estate Investment Trust Valuation – August 2018 $TSE-CRR.UN

Company Profile (excerpt from Reuters): Crombie Real Estate Investment Trust is a Canada-based unincorporated open-ended real estate investment trust (REIT). The Trust invests in income-producing retail, office and mixed use properties in Canada. It owns and operates primarily retail and office real estate assets located in Canada. It owns a portfolio of over 280 investment properties in 10 provinces, comprising approximately 19.1 million square feet of gross leasable area (GLA). It focuses on owning, operating and developing a portfolio of high quality grocery and drug store anchored shopping centers, freestanding stores and mixed use developments primarily in Canada’s urban and suburban markets. Its property portfolio includes Aberdeen Business Centre, Barrington Place, Brunswick Place, Kenmount Business Centre, Barrington Tower, CIBC Building, Amherst Centre, Avalon Mall, County Fair Mall, 1 Avenue NW Safeway, 2 Avenue West Safeway, 13 Avenue, Kildonan Green, Yellowhead Highway Safeway, among others.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of TSE-CRR.UN – August 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $1,178,043,838 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.11 Fail
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 77.21% Pass
6. Moderate PEmg Ratio PEmg < 20 98.21 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.35 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.11 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -5.12 Fail
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $0.13
MG Growth Estimate 15.00%
MG Value $5.16
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth $1.94
MG Value based on 0% Growth $1.14
Market Implied Growth Rate 44.85%
Current Price $13.16
% of Intrinsic Value 255.09%

Crombie Real Estate Investment Trust does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the small size, low current ratio, insufficient earnings stability over the last ten years, and the high PEmg ratio. The Enterprising Investor has concerns regarding the level of debt relative to the current assets, and the lack of earnings stability over the last five years. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $-0.32 in 2014 to an estimated $0.13 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 44.85% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Crombie Real Estate Investment Trust revealed the company was trading above its Graham Number of $7.74. The company pays a dividend of $0.89 per share, for a yield of 6.8%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 98.21, which was above the industry average of 47.15. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-16.77.

Crombie Real Estate Investment Trust scores quite poorly in the ModernGraham grading system, with an overall grade of D.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$16.77
Graham Number $7.74
PEmg 98.21
Current Ratio 0.11
PB Ratio 1.35
Current Dividend $0.89
Dividend Yield 6.76%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2018
Total Current Assets $48,688,000
Total Current Liabilities $460,671,000
Long-Term Debt $2,108,185,000
Total Assets $4,063,543,000
Intangible Assets $0
Total Liabilities $2,587,986,000
Shares Outstanding (Diluted Average) 151,463,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.46
Dec2017 $0.20
Dec2016 $0.00
Dec2015 -$0.39
Dec2014 -$0.32
Dec2013 -$0.39
Dec2012 -$0.41
Dec2011 -$0.43
Dec2010 $0.44
Dec2009 $0.36
Dec2008 $0.57
Dec2007 $0.49
Dec2006 $0.44

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.13
Dec2017 -$0.08
Dec2016 -$0.25
Dec2015 -$0.38
Dec2014 -$0.32
Dec2013 -$0.24
Dec2012 -$0.08
Dec2011 $0.16
Dec2010 $0.45
Dec2009 $0.43
Dec2008 $0.41
Dec2007 $0.28
Dec2006 $0.15

Recommended Reading:

Other ModernGraham posts about the company

5 Overvalued Canadian Stocks for Intelligent Investors – March 2017
Crombie Real Estate Investment Trust Valuation – Initial Coverage $TSE:CRR.UN

Other ModernGraham posts about related companies

Charles River Laboratories International Inc Valuation – August 2018 $CRL
SmartCentres Real Estate Investment Trust Valuation – August 2018 $TSE-SRU.UN
Camden Property Trust Valuation – August 2018 $CPT
Senior Housing Properties Trust Valuation – August 2018 $SNH
CoreSite Realty Corp Valuation – August 2018 $COR
Tanger Factory Outlet Centers Inc Valuation – July 2018 $SKT
Capstead Mortgage Corp Valuation – July 2018 $CMO
Mack-Cali Realty Corp Valuation – July 2018 $CLI
Chesapeake Lodging Trust Valuation – July 2018 $CHSP
Alexander & Baldwin Inc Valuation – July 2018 $ALEX

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

SmartCentres Real Estate Investment Trust Valuation – August 2018 $TSE-SRU.UN

Company Profile (excerpt from Reuters): SmartCentres Real Estate Investment Trust, formerly Smart REIT, is a Canada-based real estate investment trust. The Company owns and manages approximately 30 million square feet in value-oriented, principally Walmart-anchored retail centers, having national and regional retailers as well as neighborhood merchants. In addition, the Company is a joint-venture partner in the Premium Outlets locations in Toronto and Montreal with Simon Property Group. SmartCentres Real Estate Investment Trust’s portfolio also includes: residential properties, such as single-family, condominium and rental; retirement homes; office, as well as self-storage, either on its urban properties such as the Vaughan Metropolitan Centre or as an adjunct to its existing shopping centers.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of TSE-SRU.UN – August 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $4,074,007,274 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.35 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -2.06% Fail
6. Moderate PEmg Ratio PEmg < 20 15.24 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.99 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.35 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -6.53 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Fail

 

Stage 2: Determination of Intrinsic Value

EPSmg $2.01
MG Growth Estimate -4.25%
MG Value $0.00
Opinion Overvalued
MG Grade C
MG Value based on 3% Growth $29.08
MG Value based on 0% Growth $17.05
Market Implied Growth Rate 3.37%
Current Price $30.57
% of Intrinsic Value N/A

SmartCentres Real Estate Investment Trst does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings growth over the last ten years. The Enterprising Investor has concerns regarding the level of debt relative to the current assets, and the lack of earnings growth over the last five years. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after seeing its EPSmg (normalized earnings) decline from $2.96 in 2014 to an estimated $2.01 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 3.37% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into SmartCentres Real Estate Investment Trst revealed the company was trading below its Graham Number of $35.66. The company pays a dividend of $1.71 per share, for a yield of 5.6%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 15.24, which was below the industry average of 47.15, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-27.1.

SmartCentres Real Estate Investment Trst receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$27.10
Graham Number $35.66
PEmg 15.24
Current Ratio 0.35
PB Ratio 0.99
Current Dividend $1.71
Dividend Yield 5.60%
Number of Consecutive Years of Dividend Growth 4

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2018
Total Current Assets $293,338,000
Total Current Liabilities $848,075,000
Long-Term Debt $3,622,809,000
Total Assets $9,513,881,000
Intangible Assets $49,798,000
Total Liabilities $4,592,418,000
Shares Outstanding (Diluted Average) 158,617,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.23
Dec2017 $1.88
Dec2016 $2.08
Dec2015 $1.75
Dec2014 $1.67
Dec2013 $2.04
Dec2012 $6.81
Dec2011 $1.43
Dec2010 $4.65
Dec2009 $0.24
Dec2008 $0.95
Dec2007 $0.33
Dec2006 $0.26
Dec2005 $0.55
Dec2004 $0.51
Dec2003 $1.29
Mar2002 $0.86
Mar2001 $0.23
Mar2000 $0.18
Mar1999 $0.23

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.01
Dec2017 $1.89
Dec2016 $2.22
Dec2015 $2.44
Dec2014 $2.96
Dec2013 $3.42
Dec2012 $3.68
Dec2011 $1.91
Dec2010 $1.87
Dec2009 $0.47
Dec2008 $0.56
Dec2007 $0.44
Dec2006 $0.56
Dec2005 $0.71
Dec2004 $0.73
Dec2003 $0.74
Mar2002 $0.41

Recommended Reading:

Other ModernGraham posts about the company

Smart REIT Valuation – Initial Coverage $TSE:SRU.UN

Other ModernGraham posts about related companies

Camden Property Trust Valuation – August 2018 $CPT
Senior Housing Properties Trust Valuation – August 2018 $SNH
CoreSite Realty Corp Valuation – August 2018 $COR
Tanger Factory Outlet Centers Inc Valuation – July 2018 $SKT
Capstead Mortgage Corp Valuation – July 2018 $CMO
Mack-Cali Realty Corp Valuation – July 2018 $CLI
Chesapeake Lodging Trust Valuation – July 2018 $CHSP
Alexander & Baldwin Inc Valuation – July 2018 $ALEX
Summit Hotel Properties Inc Valuation – July 2018 $INN
Sabra Health Care REIT Inc Valuation – July 2018 $SBRA

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Camden Property Trust Valuation – August 2018 $CPT

Company Profile (excerpt from Reuters): Camden Property Trust, incorporated in 1933, is a real estate investment trust (REIT). The Company is engaged in the ownership, management, development, redevelopment, acquisition and construction of multifamily apartment communities. As of December 31, 2016, the Company owned interests in, operated, or were developing 159 multifamily properties, which consisted of 55,366 apartment homes across the United States. The Company also owns land holdings, which it may develop into multifamily communities. The Company’s properties typically consist of mid-rise buildings or two and three story buildings in a landscaped setting and provide residents with a range of amenities common to multifamily rental properties. The 152 operating properties in which it owned interests and operated, as of December 31, 2016, averaged 953 square feet of living area per apartment home. As of December 31, 2016, 137 of its operating properties had over 200 apartment homes.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of CPT – August 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $8,767,786,648 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.38 Fail
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 6621.05% Pass
6. Moderate PEmg Ratio PEmg < 20 26.44 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.57 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.38 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -13.94 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $3.49
MG Growth Estimate 3.27%
MG Value $52.58
Opinion Overvalued
MG Grade D+
MG Value based on 3% Growth $50.66
MG Value based on 0% Growth $29.70
Market Implied Growth Rate 8.97%
Current Price $92.38
% of Intrinsic Value 175.70%

Camden Property Trust does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings stability over the last ten years, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $2.87 in 2014 to an estimated $3.49 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 8.97% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Camden Property Trust revealed the company was trading above its Graham Number of $36.25. The company pays a dividend of $3 per share, for a yield of 3.2%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 26.44, which was below the industry average of 47.15, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-27.34.

Camden Property Trust scores quite poorly in the ModernGraham grading system, with an overall grade of D+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$27.34
Graham Number $36.25
PEmg 26.44
Current Ratio 0.38
PB Ratio 2.57
Current Dividend $3.00
Dividend Yield 3.25%
Number of Consecutive Years of Dividend Growth 7

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2018
Total Current Assets $97,125,000
Total Current Liabilities $255,309,000
Long-Term Debt $2,205,288,000
Total Assets $6,131,906,000
Intangible Assets $0
Total Liabilities $2,703,302,000
Shares Outstanding (Diluted Average) 95,337,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.59
Dec2017 $2.13
Dec2016 $9.05
Dec2015 $2.76
Dec2014 $3.27
Dec2013 $3.78
Dec2012 $3.30
Dec2011 $0.66
Dec2010 $0.33
Dec2009 -$0.80
Dec2008 $1.28
Dec2007 $2.51
Dec2006 $3.96
Dec2005 $3.58
Dec2004 $0.98
Dec2003 $0.71
Dec2002 $1.73
Dec2001 $1.41
Dec2000 $1.63
Dec1999 $1.23
Dec1998 $1.12

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $3.49
Dec2017 $4.36
Dec2016 $5.13
Dec2015 $3.03
Dec2014 $2.87
Dec2013 $2.26
Dec2012 $1.32
Dec2011 $0.49
Dec2010 $0.75
Dec2009 $1.34
Dec2008 $2.43
Dec2007 $2.79
Dec2006 $2.68
Dec2005 $1.92
Dec2004 $1.16
Dec2003 $1.28
Dec2002 $1.52

Recommended Reading:

Other ModernGraham posts about the company

14 Best Stocks for Value Investors This Week – 2/11/17
Camden Property Trust Valuation – Initial Coverage $CPT

Other ModernGraham posts about related companies

Senior Housing Properties Trust Valuation – August 2018 $SNH
CoreSite Realty Corp Valuation – August 2018 $COR
Tanger Factory Outlet Centers Inc Valuation – July 2018 $SKT
Capstead Mortgage Corp Valuation – July 2018 $CMO
Mack-Cali Realty Corp Valuation – July 2018 $CLI
Chesapeake Lodging Trust Valuation – July 2018 $CHSP
Alexander & Baldwin Inc Valuation – July 2018 $ALEX
Summit Hotel Properties Inc Valuation – July 2018 $INN
Sabra Health Care REIT Inc Valuation – July 2018 $SBRA
National Retail Properties Inc Valuation – July 2018 $NNN

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Senior Housing Properties Trust Valuation – August 2018 $SNH

Company Profile (excerpt from Reuters): Senior Housing Properties Trust, incorporated on December 16, 1998, is a real estate investment trust (REIT). The Company’s segments include triple net senior living communities that provide short term and long term residential care and other services for residents; managed senior living communities that provide short term and long term residential care and other services for residents; properties leased to medical providers, medical related businesses, clinics and biotech laboratory tenants (MOBs), and all other, including certain properties that offer wellness, fitness and spa services to members.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of SNH – August 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $4,288,838,109 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.52 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -37.59% Fail
6. Moderate PEmg Ratio PEmg < 20 30.85 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.26 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.52 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 155.04 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Fail

 

Stage 2: Determination of Intrinsic Value

EPSmg $0.59
MG Growth Estimate -4.25%
MG Value $0.00
Opinion Overvalued
MG Grade D+
MG Value based on 3% Growth $8.55
MG Value based on 0% Growth $5.01
Market Implied Growth Rate 11.17%
Current Price $18.18
% of Intrinsic Value N/A

Senior Housing Properties Trust does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings growth over the last ten years, and the high PEmg ratio. The Enterprising Investor has concerns regarding the level of debt relative to the net current assets, and the lack of earnings growth over the last five years. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after seeing its EPSmg (normalized earnings) decline from $0.84 in 2014 to an estimated $0.59 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 11.17% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Senior Housing Properties Trust revealed the company was trading above its Graham Number of $12.6. The company pays a dividend of $1.56 per share, for a yield of 8.6%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 30.85, which was below the industry average of 47.15, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-16.48.

Senior Housing Properties Trust scores quite poorly in the ModernGraham grading system, with an overall grade of D+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$16.48
Graham Number $12.60
PEmg 30.85
Current Ratio 1.52
PB Ratio 1.26
Current Dividend $1.56
Dividend Yield 8.58%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2018
Total Current Assets $53,241,000
Total Current Liabilities $35,075,000
Long-Term Debt $2,816,477,000
Total Assets $7,384,064,000
Intangible Assets $490,505,000
Total Liabilities $3,967,947,000
Shares Outstanding (Diluted Average) 237,493,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.54
Dec2017 $0.62
Dec2016 $0.60
Dec2015 $0.53
Dec2014 $0.80
Dec2013 $0.81
Dec2012 $0.80
Dec2011 $1.01
Dec2010 $0.91
Dec2009 $0.90
Dec2008 $1.01
Dec2007 $1.03
Dec2006 $0.91
Dec2005 $0.93
Dec2004 $0.89
Dec2003 $0.78
Dec2002 $0.89
Dec2001 $0.55
Dec2000 $2.25
Dec1999 $0.57
Dec1998 $1.78

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.59
Dec2017 $0.63
Dec2016 $0.66
Dec2015 $0.73
Dec2014 $0.84
Dec2013 $0.87
Dec2012 $0.91
Dec2011 $0.96
Dec2010 $0.94
Dec2009 $0.96
Dec2008 $0.98
Dec2007 $0.94
Dec2006 $0.89
Dec2005 $0.86
Dec2004 $0.91
Dec2003 $0.95
Dec2002 $1.09

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Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

CoreSite Realty Corp Valuation – August 2018 $COR

Company Profile (excerpt from Reuters): CoreSite Realty Corporation (CoreSite), incorporated on February 17, 2010, is an integrated, self-administered and self-managed real estate investment trust (REIT). The Company, through its controlling interest in CoreSite, L.P., is engaged in the business of ownership, acquisition, construction and operation of data centers across a range of markets in the United States, including the Northern Virginia (including Washington District of Columbia), New York and San Francisco Bay areas, Chicago, Los Angeles, Boston, Miami and Denver. The enterprises, network operators, cloud providers and supporting service providers choose CoreSite to connect and protect their data, applications and computing workloads. As of December 31, 2016, the Company had delivered data center and interconnection solutions to customer ecosystem across eight North American markets. In addition to geographic markets, the Company groups its customers into various industry verticals, including enterprises; cloud and information technology (IT) service providers, and networks and mobility.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of COR – August 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $5,500,648,213 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.28 Fail
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -1434.15% Fail
6. Moderate PEmg Ratio PEmg < 20 68.17 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 10.17 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.28 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -11.64 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $1.68
MG Growth Estimate 15.00%
MG Value $64.55
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth $24.31
MG Value based on 0% Growth $14.25
Market Implied Growth Rate 29.84%
Current Price $114.30
% of Intrinsic Value 177.07%

CoreSite Realty Corp does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings stability or growth over the last ten years, and the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $0.35 in 2014 to an estimated $1.68 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 29.84% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into CoreSite Realty Corp revealed the company was trading above its Graham Number of $19.65. The company pays a dividend of $3.58 per share, for a yield of 3.1%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 68.17, which was above the industry average of 47.15. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-39.39.

CoreSite Realty Corp scores quite poorly in the ModernGraham grading system, with an overall grade of D.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$39.39
Graham Number $19.65
PEmg 68.17
Current Ratio 0.28
PB Ratio 10.17
Current Dividend $3.58
Dividend Yield 3.13%
Number of Consecutive Years of Dividend Growth 8

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Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2018
Total Current Assets $34,643,000
Total Current Liabilities $123,164,000
Long-Term Debt $1,030,536,000
Total Assets $1,767,098,000
Intangible Assets $66,570,000
Total Liabilities $1,382,498,000
Shares Outstanding (Diluted Average) 34,220,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.09
Dec2017 $1.84
Dec2016 $1.54
Dec2015 $1.03
Dec2014 $0.66
Dec2013 $0.49
Dec2012 $0.22
Dec2011 -$0.24
Dec2010 -$0.17

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.68
Dec2017 $1.35
Dec2016 $1.00
Dec2015 $0.63
Dec2014 $0.35
Dec2013 $0.15
Dec2012 -$0.02
Dec2011 -$0.13
Dec2010 -$0.06

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Other ModernGraham posts about the company

CoreSite Realty Corp Valuation – Initial Coverage $COR

Other ModernGraham posts about related companies

Tanger Factory Outlet Centers Inc Valuation – July 2018 $SKT
Capstead Mortgage Corp Valuation – July 2018 $CMO
Mack-Cali Realty Corp Valuation – July 2018 $CLI
Chesapeake Lodging Trust Valuation – July 2018 $CHSP
Alexander & Baldwin Inc Valuation – July 2018 $ALEX
Summit Hotel Properties Inc Valuation – July 2018 $INN
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Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

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