ASX:HPI

Stock Analysis Report

Hotel Property Investments

Executive Summary

HPI owns a Portfolio of freehold hotels and associated specialty tenancies located throughout Queensland and South Australia.


Snowflake Analysis

Undervalued average dividend payer.

Share Price & News

How has Hotel Property Investments's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: HPI's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

1.1%

HPI

-2.9%

AU REITs

0.1%

AU Market


1 Year Return

-40.6%

HPI

-37.0%

AU REITs

-22.8%

AU Market

Return vs Industry: HPI underperformed the Australian REITs industry which returned -37% over the past year.

Return vs Market: HPI underperformed the Australian Market which returned -22.8% over the past year.


Shareholder returns

HPIIndustryMarket
7 Day1.1%-2.9%0.1%
30 Day-40.7%-40.4%-28.8%
90 Day-40.7%-39.6%-30.1%
1 Year-36.8%-40.6%-34.2%-37.0%-19.4%-22.8%
3 Year-22.3%-35.4%-14.6%-26.7%-9.5%-21.7%
5 Year-1.1%-30.9%8.9%-15.2%2.1%-20.8%

Price Volatility Vs. Market

How volatile is Hotel Property Investments's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Hotel Property Investments undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HPI (A$1.92) is trading below our estimate of fair value (A$5.02)

Significantly Below Fair Value: HPI is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: HPI is good value based on its PE Ratio (5.8x) compared to the REITs industry average (9.2x).

PE vs Market: HPI is good value based on its PE Ratio (5.8x) compared to the Australian market (12.6x).


Price to Earnings Growth Ratio

PEG Ratio: HPI is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: HPI is good value based on its PB Ratio (0.6x) compared to the AU REITs industry average (0.8x).


Next Steps

Future Growth

How is Hotel Property Investments forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

4.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HPI's forecast earnings growth (4.4% per year) is above the savings rate (1.1%).

Earnings vs Market: HPI's earnings (4.4% per year) are forecast to grow slower than the Australian market (10% per year).

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

Revenue vs Market: HPI's revenue (4.3% per year) is forecast to grow faster than the Australian market (4.2% per year).

High Growth Revenue: HPI'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: HPI's Return on Equity is forecast to be low in 3 years time (6.3%).


Next Steps

Past Performance

How has Hotel Property Investments performed over the past 5 years?

1.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HPI has a large one-off gain of A$18.7M impacting its December 31 2019 financial results.

Growing Profit Margin: HPI's current net profit margins (90.7%) are lower than last year .


Past Earnings Growth Analysis

Earnings Trend: HPI's earnings have grown by 1.1% per year over the past 5 years.

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

Earnings vs Industry: HPI had negative earnings growth (-6.9%) over the past year, making it difficult to compare to the REITs industry average (1.7%).


Return on Equity

High ROE: HPI's Return on Equity (11.2%) is considered low.


Next Steps

Financial Health

How is Hotel Property Investments'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: HPI has a high level of physical assets or inventory.

Debt Coverage by Assets: HPI's debt is not covered by short term assets (assets are 0x debt).


Financial Institutions Analysis

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

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

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

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

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

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


Next Steps

Dividend

What is Hotel Property Investments's current dividend yield, its reliability and sustainability?

10.73%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: HPI's dividend (10.73%) is higher than the bottom 25% of dividend payers in the Australian market (3.37%).

High Dividend: HPI's dividend (10.73%) is in the top 25% of dividend payers in the Australian market (8.57%)


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (39.6%), HPI's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HPI's dividends in 3 years are forecast to be thoroughly covered by earnings (0.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.9yrs

Average board tenure


CEO

Don Smith

1.42s

Tenure

AU$433,186

Compensation

Mr. Donald Smith, also known as Don, has been Managing Director & Chief Executive Officer at Hotel Property Investments since October 1, 2018. Mr. Smith has been a Director at Hotel Property Investments si ...


CEO Compensation Analysis

Compensation vs Market: Don's total compensation ($USD265.69K) is below average for companies of similar size in the Australian market ($USD591.04K).

Compensation vs Earnings: Insufficient data to compare Don's compensation with company performance.


Board Members

NamePositionTenureCompensationOwnership
Donald Smith
CEO, MD & Director1.42yrsAU$433.19k0.014% A$41.9k
John Russell
Independent Non-Executive Chairman0.33yrAU$93.08k0.036% A$108.4k
Raymond Gunston
Independent Non-Executive Director6.33yrsAU$104.03k0.080% A$241.4k
Lachlan Edwards
Independent Non-Executive Director6.33yrsAU$95.81k0.11% A$331.2k
Giselle Collins
Independent Non-Executive Director2.92yrsAU$95.81k0.015% A$46.1k

2.9yrs

Average Tenure

Experienced Board: HPI's board of directors are not considered experienced ( 2.9 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: HPI insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Hotel Property Investments's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Hotel Property Investments
  • Ticker: HPI
  • Exchange: ASX
  • Founded:
  • Industry: Specialized REITs
  • Sector: Real Estate
  • Market Cap: AU$301.119m
  • Shares outstanding: 156.83m
  • Website: https://www.hpitrust.com.au

Location

  • Hotel Property Investments
  • IBM Centre
  • Suite 2, Level 17
  • Melbourne
  • Victoria
  • 3006
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HPIASX (Australian Securities Exchange)YesStapled SecuritiesAUAUDDec 2013
HPICHIA (Chi-X Australia)YesStapled SecuritiesAUAUDDec 2013
HTPI.FOTCPK (Pink Sheets LLC)YesStapled SecuritiesUSUSDDec 2013

Biography

HPI owns a Portfolio of freehold hotels and associated specialty tenancies located throughout Queensland and South Australia. The pubs are leased to the Queensland Venue Company (“QVC”), a joint venture between Coles group and Australian Venue Company, and to Australian Leisure & Hospitality ("ALH"), a joint venture 75% owned by the Woolworths group. HPI’s objective is to maximise the long term income and capital returns from its investments for the benefit of its Securityholders. Approximately 93% of the income is earned from the pubs leased to QVC and ALH. The remaining rental income is derived from Speciality Tenants leasing the On-site Specialty Stores. Specialty Tenants include a mix of franchisors and franchisees including 7-Eleven, Nightowl, Nando’s, Subway, Noodle Box, The Good Guys and Quest Apartments. The Responsible Entity of the Trust is Hotel Property Investments Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/28 10:39
End of Day Share Price2020/03/27 00:00
Earnings2019/12/31
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.