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

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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:

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Camden Property Trust Valuation – Initial Coverage $CPT

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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.

Camden Property Trust Valuation – Initial Coverage $CPT

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 – February 2017.  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 Camden Property Trust (CPT) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Camden Property Trust is a real estate investment trust (REIT). The Company is engaged in the ownership, management, development, redevelopment, acquisition and construction of multifamily apartment communities. The Company operates in the ownership, management, development, redevelopment, acquisition, and construction of multifamily apartment communities segment. The Company owns interests in, operates, or is developing approximately 180 multifamily properties consisting of approximately 62,650 apartment homes across the United States. Of the over 180 properties, approximately eight properties are under construction. It also owns land holdings. Its properties consist of mid-rise buildings or two and three story buildings in a landscaped setting and provide residents with various amenities common to multifamily rental properties. Its operating properties have over 200 apartment homes. Its properties include Camden Copper Square, Camden Montierra and Camden Ballantyne.

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Downloadable PDF version of this valuation:

ModernGraham Valuation of CPT – February 2017

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 all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $7,214,472,682 Pass
2. Earnings Stability Positive EPS for 10 years prior Fail
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 1513.58% Pass
5. Moderate PEmg Ratio PEmg < 20 20.23 Fail
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.48 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

EPSmg $4.07
MG Growth Estimate 12.00%
MG Value $132.41
Opinion Undervalued
MG Grade C+
MG Value based on 3% Growth $59.06
MG Value based on 0% Growth $34.62
Market Implied Growth Rate 5.87%
Current Price $82.43
% of Intrinsic Value 62.25%

Camden Property Trust is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability over the last ten years, and the high PEmg ratio. The Enterprising Investor has no initial concerns. 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 $2.26 in 2013 to an estimated $4.07 for 2017. This level of demonstrated earnings growth outpaces the market’s implied estimate of 5.87% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Camden Property Trust revealed the company was trading above its Graham Number of $31.26. The company pays a dividend of $3 per share, for a yield of 3.6%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 20.24, 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.

Camden Property Trust receives an average overall rating in the ModernGraham grading system, scoring a C+.

Stage 3: Information for Further Research

Graham Number $31.26
PEmg 20.24
PB Ratio 2.48
Dividend Yield 3.64%
TTM Dividend $3.00
Number of Consecutive Years of Dividend Growth 7

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

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2016
Long-Term Debt & Capital Lease Obligation $2,480,588,000
Total Assets $6,028,152,000
Intangible Assets $0
Total Liabilities $3,013,279,000
Shares Outstanding (Diluted Average) 90,844,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.26
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
Dec1997 $1.41

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $4.07
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
Dec2001 $1.39

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

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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.

LaSalle Hotel Properties Valuation – September 2018 $LHO

Company Profile (excerpt from Reuters): LaSalle Hotel Properties, incorporated on January 15, 1998, is a self-administered and self-managed real estate investment trust. The Company primarily buys, owns, redevelops and leases upscale and luxury full-service hotels located in convention, resort and urban business markets. The Company owns interests in hotels and guest rooms located in nine states of the United States and the District of Columbia (DC). The Company’s operations are conducted through LaSalle Hotel Operating Partnership, L.P. (the Operating Partnership).

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of LHO – September 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 $3,842,945,759 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.62 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 -840.74% Fail
6. Moderate PEmg Ratio PEmg < 20 28.41 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.63 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 1.62 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 8.17 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 $1.23
MG Growth Estimate 4.92%
MG Value $22.47
Opinion Overvalued
MG Grade C+
MG Value based on 3% Growth $17.77
MG Value based on 0% Growth $10.42
Market Implied Growth Rate 9.95%
Current Price $34.81
% of Intrinsic Value 154.89%

LaSalle Hotel Properties is suitable for the Enterprising Investor but not 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 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 Overvalued after growing its EPSmg (normalized earnings) from $0.92 in 2014 to an estimated $1.23 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 9.95% 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 LaSalle Hotel Properties revealed the company was trading above its Graham Number of $13.85. The company pays a dividend of $1.8 per share, for a yield of 5.2%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 28.41, which was below the industry average of 75.38, 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 $-8.56.

LaSalle Hotel Properties receives an average overall rating in the ModernGraham grading system, scoring a C+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$8.56
Graham Number $13.85
PEmg 28.41
Current Ratio 1.62
PB Ratio 1.63
Current Dividend $1.80
Dividend Yield 5.17%
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 6/1/2018
Total Current Assets $343,334,000
Total Current Liabilities $211,316,000
Long-Term Debt $1,078,403,000
Total Assets $3,651,538,000
Intangible Assets $0
Total Liabilities $1,289,719,000
Shares Outstanding (Diluted Average) 110,552,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.39
Dec2017 $1.54
Dec2016 $2.07
Dec2015 $1.09
Dec2014 $1.88
Dec2013 $0.73
Dec2012 $0.52
Dec2011 $0.16
Dec2010 -$0.36
Dec2009 -$0.34
Dec2008 $0.25
Dec2007 $1.53
Dec2006 $1.85
Dec2005 $0.67
Dec2004 $0.39
Dec2003 $1.37
Dec2002 -$0.21
Dec2001 $0.21
Dec2000 $0.32
Dec1999 $0.91
Dec1998 $0.80

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.23
Dec2017 $1.58
Dec2016 $1.49
Dec2015 $1.09
Dec2014 $0.92
Dec2013 $0.34
Dec2012 $0.12
Dec2011 $0.02
Dec2010 $0.17
Dec2009 $0.55
Dec2008 $0.98
Dec2007 $1.28
Dec2006 $1.04
Dec2005 $0.59
Dec2004 $0.50
Dec2003 $0.55
Dec2002 $0.22

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LaSalle Hotel Properties Valuation – Initial Coverage $LHO

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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.

Cousins Properties Inc Valuation – September 2018 $CUZ

Company Profile (excerpt from Reuters): Cousins Properties Incorporated (Cousins) is a self-administered and self-managed real estate investment trust (REIT). The Company’s segments include Office, Mixed-Use, Other, Atlanta, Austin, Charlotte, Orlando, Tampa, Phoenix and Other. The Company develops, acquires, leases, manages and owns primarily Class A office properties and opportunistic mixed-use developments in Sunbelt markets with a focus on Georgia, Texas and North Carolina. The Company manages a 15.8 million-square-foot trophy office portfolio in the Sun Belt markets of Atlanta, Austin, Charlotte, Orlando, Tampa and Tempe. As of December 31, 2016, the Company’s portfolio of real estate assets consisted of interests in 16.2 million square feet of office space and 786,000 square feet of mixed-use space.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of CUZ – September 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 $3,875,947,876 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.31 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 -167.38% Fail
6. Moderate PEmg Ratio PEmg < 20 27.72 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.39 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 1.31 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 35.26 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 $0.33
MG Growth Estimate 15.00%
MG Value $12.81
Opinion Undervalued
MG Grade C
MG Value based on 3% Growth $4.82
MG Value based on 0% Growth $2.83
Market Implied Growth Rate 9.61%
Current Price $9.22
% of Intrinsic Value 71.99%

Cousins Properties 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 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 Undervalued after growing its EPSmg (normalized earnings) from $0.14 in 2014 to an estimated $0.33 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 9.61% 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 Cousins Properties Inc revealed the company was trading above its Graham Number of $4.22. The company pays a dividend of $0.3 per share, for a yield of 3.3%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 27.72, which was below the industry average of 75.38, 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 $-2.82.

Cousins Properties Inc receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$2.82
Graham Number $4.22
PEmg 27.72
Current Ratio 1.31
PB Ratio 1.39
Current Dividend $0.30
Dividend Yield 3.25%
Number of Consecutive Years of Dividend Growth 1

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 $129,450,000
Total Current Liabilities $98,562,000
Long-Term Debt $1,089,264,000
Total Assets $4,166,252,000
Intangible Assets $164,753,000
Total Liabilities $1,333,908,000
Shares Outstanding (Diluted Average) 427,501,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.12
Dec2017 $0.52
Dec2016 $0.31
Dec2015 $0.58
Dec2014 $0.22
Dec2013 $0.76
Dec2012 $0.32
Dec2011 -$1.36
Dec2010 -$0.27
Dec2009 $0.22
Dec2008 $0.15
Dec2007 $0.33
Dec2006 $4.14
Dec2005 $0.67
Dec2004 $7.84
Dec2003 $4.83
Dec2002 $0.96
Dec2001 $1.41
Dec2000 $1.25
Dec1999 $2.12
Dec1998 $0.94

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.33
Dec2017 $0.45
Dec2016 $0.42
Dec2015 $0.36
Dec2014 $0.14
Dec2013 $0.05
Dec2012 -$0.27
Dec2011 -$0.44
Dec2010 $0.32
Dec2009 $0.78
Dec2008 $1.58
Dec2007 $2.72
Dec2006 $3.83
Dec2005 $3.50
Dec2004 $4.36
Dec2003 $2.46
Dec2002 $1.29

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

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.

Cominar Real Estate Investment Trust Valuation – September 2018 $TSE:CUF.UN

Company Profile (excerpt from Reuters): Cominar REIT is a Canada-based real estate investment trust (REIT). The Company is a commercial property owner and manager in the province of Quebec. Its segments include Office, Retail, and Industrial and mixed-use. Its activities include a portfolio of three property types, including office properties, retail properties, and industrial and mixed-use properties located in Canadian provinces. It owns and manages a portfolio of approximately 570 properties, including over 140 office buildings, approximately 200 retail buildings and over 230 industrial and mixed-use buildings located in Quebec, Ontario, the Atlantic Provinces and Western Canada. Its portfolio of properties includes 4635 1re Avenue, 5055 Wilfrid-Hamel Ouest Blvd, 2014 Cyrille-Duquet St, 455 du Marais St, 979 de Bourgogne Ave, 400 Cooper St, 355 du Marais St, 3323 du Carrefour St, 1990 Cyrille-Duquet St, 2025 Lavoisier St and 280 Racine St.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of TSE-CUF.UN – September 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 $2,194,191,303 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.11 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 -93.24% Fail
6. Moderate PEmg Ratio PEmg < 20 32.19 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.69 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 1.11 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 265.84 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 $0.37
MG Growth Estimate -4.25%
MG Value $0.00
Opinion Overvalued
MG Grade C
MG Value based on 3% Growth $5.43
MG Value based on 0% Growth $3.18
Market Implied Growth Rate 11.84%
Current Price $12.06
% of Intrinsic Value N/A

Cominar REIT 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 high PEmg ratio. 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 $2.03 in 2014 to an estimated $0.37 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 11.84% 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 Cominar REIT revealed the company was trading below its Graham Number of $20.26. The company pays a dividend of $1.33 per share, for a yield of 11.1%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 32.19, which was below the industry average of 75.38, 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 $-19.58.

Cominar REIT receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$19.58
Graham Number $20.26
PEmg 32.19
Current Ratio 1.11
PB Ratio 0.69
Current Dividend $1.33
Dividend Yield 11.05%
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 $136,370,000
Total Current Liabilities $122,922,000
Long-Term Debt $3,574,964,000
Total Assets $6,873,107,000
Intangible Assets $139,982,000
Total Liabilities $3,704,419,000
Shares Outstanding (Diluted Average) 182,197,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.05
Dec2017 -$2.13
Dec2016 $1.40
Dec2015 $1.62
Dec2014 $1.45
Dec2013 $1.98
Dec2012 $2.91
Dec2011 $2.45
Dec2010 $1.72
Dec2009 $0.57
Dec2008 $0.54
Dec2007 $0.69
Dec2006 $0.98
Dec2005 $0.95
Dec2004 $0.98
Dec2003 $1.14
Dec2002 $1.14
Dec2001 $1.08
Dec2000 $1.03
Dec1999 $1.01
Dec1998 $0.56

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.37
Dec2017 $0.31
Dec2016 $1.65
Dec2015 $1.87
Dec2014 $2.03
Dec2013 $2.19
Dec2012 $2.08
Dec2011 $1.51
Dec2010 $0.99
Dec2009 $0.67
Dec2008 $0.75
Dec2007 $0.89
Dec2006 $1.00
Dec2005 $1.03
Dec2004 $1.07
Dec2003 $1.10
Dec2002 $1.04

Recommended Reading:

Other ModernGraham posts about the company

Cominar Real Estate Investment Trust – Initial Coverage $TSE:CUF.UN

Other ModernGraham posts about related companies

CareTrust REIT Inc Valuation – August 2018 $CTRE
Lamar Advertising Co Valuation – August 2018 $LAMR
Uniti Group Inc Valuation – August 2018 $UNIT
Kite Realty Group Trust Valuation – August 2018 $KRG
Kilroy Realty Corp Valuation – August 2018 $KRC
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

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.

CareTrust REIT Inc Valuation – August 2018 $CTRE

Company Profile (excerpt from Reuters): CareTrust REIT, Inc., incorporated on October 29, 2013, is a self-administered, self-managed real estate investment trust (REIT). The Company is primarily engaged in the ownership, acquisition and leasing of healthcare-related properties. It makes investments in healthcare-related real estate assets. As of December 31, 2016, the Company’s real estate portfolio consisted of 154 skilled nursing facilities (SNFs), SNF Campuses, assisted living facilities (ALFs) and independent living facilities (ILFs). As of December 31, 2016, the 93 facilities leased to The Ensign Group, Inc. (Ensign) had a total of 9,916 beds and units and are located in Arizona, California, Colorado, Idaho, Iowa, Nebraska, Nevada, Texas, Utah and Washington; the 16 facilities leased to affiliates of Pristine Senior Living, LLC (Pristine) had a total of 1,488 beds and units and are located in Ohio; and the 42 remaining leased properties had a total of 3,515 beds and units and are located in California, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Maryland, Michigan, Minnesota, North Carolina, Texas, Virginia, Washington and Wisconsin.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of CTRE – 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 $1,476,340,335 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.89 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 5133.33% Pass
6. Moderate PEmg Ratio PEmg < 20 41.78 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.20 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 0.89 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -169.63 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 $0.44
MG Growth Estimate 15.00%
MG Value $16.99
Opinion Fairly Valued
MG Grade C-
MG Value based on 3% Growth $6.40
MG Value based on 0% Growth $3.75
Market Implied Growth Rate 16.64%
Current Price $18.44
% of Intrinsic Value 108.53%

Caretrust REIT Inc 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, 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 Fairly Valued after growing its EPSmg (normalized earnings) from $-0.12 in 2014 to an estimated $0.44 for 2018. This level of demonstrated earnings growth supports the market’s implied estimate of 16.64% 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 within a margin of safety relative to the price.

At the time of valuation, further research into Caretrust REIT Inc revealed the company was trading above its Graham Number of $11.14. The company pays a dividend of $0.74 per share, for a yield of 4%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 41.78, 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 $-7.17.

Caretrust REIT Inc receives an average overall rating in the ModernGraham grading system, scoring a C-.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$7.17
Graham Number $11.14
PEmg 41.78
Current Ratio 0.89
PB Ratio 2.20
Current Dividend $0.74
Dividend Yield 4.01%
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 $25,555,000
Total Current Liabilities $28,764,000
Long-Term Debt $544,338,000
Total Assets $1,211,840,000
Intangible Assets $0
Total Liabilities $573,102,000
Shares Outstanding (Diluted Average) 76,374,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.70
Dec2017 $0.35
Dec2016 $0.52
Dec2015 $0.26
Dec2014 -$0.36
Dec2013 -$0.02
Dec2012 $0.01

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.44
Dec2017 $0.26
Dec2016 $0.17
Dec2015 -$0.01
Dec2014 -$0.12
Dec2013 -$0.01

Recommended Reading:

Other ModernGraham posts about the company

Caretrust REIT Inc Valuation – Initial Coverage $CTRE

Other ModernGraham posts about related companies

Lamar Advertising Co Valuation – August 2018 $LAMR
Uniti Group Inc Valuation – August 2018 $UNIT
Kite Realty Group Trust Valuation – August 2018 $KRG
Kilroy Realty Corp Valuation – August 2018 $KRC
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

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.

Lamar Advertising Co Valuation – August 2018 $LAMR

Company Profile (excerpt from Reuters): Lamar Advertising Company, incorporated on May 16, 2014, is an outdoor advertising company. The Company operates in the advertising segment. It is engaged in the rental of advertising space on outdoor advertising displays owned and operated by the Company. The Company leases space for advertising on billboards, buses, shelters, benches and logo plates. It offers its customers an integrated service, covering all aspects of their billboard display requirements from advertisement copy production to placement and maintenance. It operates approximately three types of outdoor advertising displays, including billboards, logo signs and transit advertising displays.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of LAMR – 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 $6,479,991,800 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.48 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 -1016.83% Fail
6. Moderate PEmg Ratio PEmg < 20 25.34 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 7.01 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 1.48 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 20.55 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 $3.00
MG Growth Estimate 15.00%
MG Value $115.68
Opinion Undervalued
MG Grade C
MG Value based on 3% Growth $43.57
MG Value based on 0% Growth $25.54
Market Implied Growth Rate 8.42%
Current Price $76.13
% of Intrinsic Value 65.81%

Lamar Advertising Co 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 Undervalued after growing its EPSmg (normalized earnings) from $0.99 in 2014 to an estimated $3 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 8.42% 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 Lamar Advertising Co revealed the company was trading above its Graham Number of $27.44. The company pays a dividend of $3.32 per share, for a yield of 4.4%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 25.34, 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 $-26.96.

Lamar Advertising Co receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$26.96
Graham Number $27.44
PEmg 25.34
Current Ratio 1.48
PB Ratio 7.01
Current Dividend $3.32
Dividend Yield 4.36%
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 $381,689,000
Total Current Liabilities $258,035,000
Long-Term Debt $2,540,955,000
Total Assets $4,119,970,000
Intangible Assets $2,491,277,000
Total Liabilities $3,046,450,000
Shares Outstanding (Diluted Average) 98,835,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.98
Dec2017 $3.23
Dec2016 $3.05
Dec2015 $2.72
Dec2014 $2.66
Dec2013 $0.42
Dec2012 $0.08
Dec2011 $0.07
Dec2010 -$0.44
Dec2009 -$0.64
Dec2008 $0.02
Dec2007 $0.47
Dec2006 $0.42
Dec2005 $0.39
Dec2004 $0.12
Dec2003 -$0.78
Dec2002 -$0.36
Dec2001 -$1.11
Dec2000 -$1.04
Dec1999 -$0.65
Dec1998 -$0.24

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $3.00
Dec2017 $2.82
Dec2016 $2.34
Dec2015 $1.72
Dec2014 $0.99
Dec2013 $0.07
Dec2012 -$0.13
Dec2011 -$0.19
Dec2010 -$0.22
Dec2009 -$0.03
Dec2008 $0.28
Dec2007 $0.31
Dec2006 $0.14
Dec2005 -$0.12
Dec2004 -$0.46
Dec2003 -$0.76
Dec2002 -$0.73

Recommended Reading:

Other ModernGraham posts about the company

Lamar Advertising Company Valuation – Initial Coverage $LAMR

Other ModernGraham posts about related companies

Kite Realty Group Trust Valuation – August 2018 $KRG
Kilroy Realty Corp Valuation – August 2018 $KRC
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

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
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.

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
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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

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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.

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

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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.

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