ASX:ARF

Stock Analysis Report

Executive Summary

Arena REIT is an ASX300 listed property group that owns, manages and develops social infrastructure property assets across Australia.

Snowflake

Fundamentals

Fair value with acceptable track record.

Share Price & News

How has Arena REIT's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

4.2%

ARF

0.8%

AU REITs

0.1%

AU Market


1 Year Return

28.3%

ARF

20.1%

AU REITs

11.9%

AU Market

Return vs Industry: ARF exceeded the Australian REITs industry which returned 20.1% over the past year.

Return vs Market: ARF exceeded the Australian Market which returned 11.9% over the past year.


Shareholder returns

ARFIndustryMarket
7 Day4.2%0.8%0.1%
30 Day4.5%1.8%-1.1%
90 Day8.7%-1.4%-1.4%
1 Year34.9%28.3%26.2%20.1%18.5%11.9%
3 Year79.5%52.2%48.1%26.7%36.4%18.1%
5 Year178.5%109.1%100.8%55.9%50.9%16.7%

Price Volatility Vs. Market

How volatile is Arena REIT's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Arena REIT undervalued compared to its fair value and its price relative to the market?

11.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ARF (A$2.99) is trading below our estimate of fair value (A$3.38)

Significantly Below Fair Value: ARF is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: ARF is good value based on its PE Ratio (13.8x) compared to the REITs industry average (16.2x).

PE vs Market: ARF is good value based on its PE Ratio (13.8x) compared to the Australian market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: ARF is poor value based on its PEG Ratio (18.6x)


Price to Book Ratio

PB vs Industry: ARF is overvalued based on its PB Ratio (1.7x) compared to the AU REITs industry average (1.2x).


Next Steps

Future Growth

How is Arena REIT forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

0.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ARF's forecast earnings growth (0.7% per year) is below the savings rate (2.3%).

Earnings vs Market: ARF's earnings (0.7% per year) are forecast to grow slower than the Australian market (10.2% per year).

High Growth Earnings: ARF's earnings are forecast to grow, but not significantly.

Revenue vs Market: ARF's revenue (4.3% per year) is forecast to grow faster than the Australian market (3.6% per year).

High Growth Revenue: ARF's revenue (4.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ARF's Return on Equity is forecast to be low in 3 years time (7.4%).


Next Steps

Past Performance

How has Arena REIT performed over the past 5 years?

3.2%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: ARF's earnings have grown by 3.2% per year over the past 5 years.

Accelerating Growth: ARF's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ARF had negative earnings growth (-7.9%) over the past year, making it difficult to compare to the REITs industry average (-16.4%).


Return on Equity

High ROE: ARF's Return on Equity (9.7%) is considered low.


Return on Assets

ROA vs Industry: ARF has a higher Return on Assets than the REITs industry average last year.


Return on Capital Employed

ROCE Improving: ARF has improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Arena REIT's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: ARF has a high level of physical assets or inventory.

Debt Coverage by Assets: ARF's debt is not covered by short term assets (assets are 0.1x debt).


Financial Institutions Analysis

Asset Level: ARF's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if ARF has a sufficient allowance for bad loans.

Low Risk Liabilities: ARF reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if ARF has an acceptable proportion of non-loan assets held.

Low Risk Deposits: ARF has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if ARF has an appropriate level of bad loans.


Next Steps

Dividend

What is Arena REIT's current dividend yield, its reliability and sustainability?

4.78%

Current Dividend Yield


Dividend Yield vs Market

company4.8%marketbottom25%2.4%markettop25%5.6%industryaverage4.4%forecastin3Years5.0%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: ARF's dividend (4.78%) is higher than the bottom 25% of dividend payers in the Australian market (2.44%).

High Dividend: ARF's dividend (4.78%) is low compared to the top 25% of dividend payers in the Australian market (5.58%).

Stable Dividend: Whilst dividend payments have been stable, ARF has been paying a dividend for less than 10 years.

Growing Dividend: ARF's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (80.2%), ARF's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ARF's dividends in 3 years are forecast to be thoroughly covered by earnings (0.3% payout ratio).


Next Steps

Management

What is the CEO of Arena REIT's salary, the management and board of directors tenure and is there insider trading?

1.3yrs

Average management tenure


CEO

Rob de Vos 0

0.7yrs

Tenure

AU$813,797

Compensation

Mr. Robert Andrew de Vos, also known as Rob, has been CEO, Managing Director and Director at Arena REIT since February 19, 2019. Mr. de Vos served as Head of Property at Arena REIT until February 19, 2019, ...


CEO Compensation Analysis

Compensation vs. Market: Rob has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the Australian market.

Compensation vs Earnings: Rob's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

1.3yrs

Average Tenure

Experienced Management: ARF's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Age and Tenure

5.9yrs

Average Tenure

Experienced Board: ARF's board of directors are considered experienced (5.9 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellAU$90,32831 Jul 19
Colonial First State Asset Management (Australia) Limited
EntityCompany
Shares32,260
Max PriceAU$2.80
BuyAU$41,97231 Jul 19
Realindex Investments Pty Limited
EntityCompany
Shares14,936
Max PriceAU$2.81
BuyAU$97,60131 Jul 19
Colonial First State Asset Management (Australia) Limited
EntityCompany
Shares34,920
Max PriceAU$2.80
BuyAU$4,729,43222 Jul 19
Colonial First State Asset Management (Australia) Limited
EntityCompany
Shares1,751,695
Max PriceAU$2.85
BuyAU$1,453,88722 Jul 19
Realindex Investments Pty Limited
EntityCompany
Shares536,330
Max PriceAU$2.71
BuyAU$26,057,75626 Jun 19
The Vanguard Group, Inc.
EntityCompany
Shares9,803,235
Max PriceAU$2.93
SellAU$7,924,73226 Jun 19
The Vanguard Group, Inc.
EntityCompany
Shares2,898,571
Max PriceAU$2.87
SellAU$25,709,42027 May 19
Australian Unity Funds Management Limited
EntityCompany
Shares9,629,000
Max PriceAU$2.67
BuyAU$2,418,95102 May 19
Realindex Investments Pty Limited
EntityCompany
Shares1,063,905
Max PriceAU$2.27
SellAU$11,600,86002 May 19
Colonial First State Asset Management (Australia) Limited
EntityCompany
Shares4,809,909
Max PriceAU$2.49
BuyAU$3,397,17102 May 19
Colonial First State Asset Management (Australia) Limited
EntityCompany
Shares1,507,217
Max PriceAU$2.26

Ownership Breakdown


Management Team

  • Sam Rist

    Head of Investor Relations

    • Tenure: 1.3yrs
  • Gareth Winter

    Company Secretary

    • Tenure: 4.8yrs
    • Compensation: AU$759.33k
  • Rob de Vos

    CEO, MD & Director

    • Tenure: 0.7yrs
    • Compensation: AU$813.80k
  • Joanne Ross

    Head of Risk & Compliance - Arena REIT Management Limited

    • Tenure: 0yrs
  • Stuart Andrews

    Head of Portfolio Management

    • Tenure: 0.8yrs
  • Kimberly Allen

    Fund Financial Controller - Arena REIT Management Limited

    • Tenure: 7.8yrs

Board Members

  • Dennis Wildenburg

    Independent Non-Executive Director

    • Tenure: 7.8yrs
    • Compensation: AU$116.00k
  • Simon Parsons

    Independent Non-Executive Director

    • Tenure: 7.5yrs
    • Compensation: AU$111.00k
  • David Ross (58yo)

    Independent Non-Executive Chairman

    • Tenure: 7yrs
    • Compensation: AU$199.00k
  • Gareth Winter

    Company Secretary

    • Tenure: 4.8yrs
    • Compensation: AU$759.33k
  • Rob de Vos

    CEO, MD & Director

    • Tenure: 0.7yrs
    • Compensation: AU$813.80k
  • Rosemary Hartnett

    Independent Non Executive Director

    • Tenure: 0.2yrs

Company Information

Arena REIT's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Arena REIT
  • Ticker: ARF
  • Exchange: ASX
  • Founded: 2014
  • Industry: Health Care REITs
  • Sector: Real Estate
  • Market Cap: AU$891.428m
  • Shares outstanding: 299.14m
  • Website: https://www.arena.com.au

Location

  • Arena REIT
  • 41 Exhibition Street
  • Level 5
  • Melbourne
  • Victoria
  • 3000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ARFASX (Australian Securities Exchange)YesOrdinary Stapled UnitsAUAUDJun 2013
ARFCHIA (Chi-X Australia)YesOrdinary Stapled UnitsAUAUDJun 2013

Biography

Arena REIT is an ASX300 listed property group that owns, manages and develops social infrastructure property assets across Australia. Our current portfolio of social infrastructure property is leased to a  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/22 10:34
End of Day Share Price2019/10/22 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.