Rural Funds Group (ASX:RFF) - Share price, News & Analysis

RFF fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	1/6
Past Performance	2/6
Financial Health	2/6
Dividends	2/6

RFF Stock Overview

Rural Funds Group is an agricultural Real Estate Investment Trust (REIT) listed on the ASX under the code RFF.

Rewards

Trading at 38.9% below our estimate of its fair value

Revenue is forecast to grow 10.25% per year

Earnings have grown 30.2% per year over the past 5 years

Risk Analysis

Debt is not well covered by operating cash flow

Dividend of 3.87% is not well covered by earnings

Large one-off items impacting financial results

Shareholders have been diluted in the past year

Rural Funds Group Peers

Charter Hall Social Infrastructure REIT

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AU$1.3b

Arena REIT

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AU$1.5b

Hotel Property Investments

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AU$693.7m

National Storage REIT

ASX:NSR

AU$2.8b

Price History & Performance

Summary of all time highs, changes and price drops for Rural Funds Group
Historical stock prices
Current Share Price	AU$3.03
52 Week High	AU$3.22
52 Week Low	AU$2.36
Beta	0.21
1 Month Change	-1.30%
3 Month Change	3.77%
1 Year Change	26.25%
3 Year Change	32.90%
5 Year Change	66.03%
Change since IPO	304.00%

Shareholder Returns

	RFF	AU REITs	AU Market
7D	4.8%	-0.07%	0.7%
1Y	26.3%	2.3%	2.1%

Return vs Industry: RFF exceeded the Australian REITs industry which returned 2.3% over the past year.

Return vs Market: RFF exceeded the Australian Market which returned 2.1% over the past year.

Price Volatility

Is RFF's price volatile compared to industry and market?
RFF volatility
RFF Average Weekly Movement	3.1%
REITs Industry Average Movement	3.5%
Market Average Movement	9.4%
10% most volatile stocks in AU Market	16.7%
10% least volatile stocks in AU Market	4.3%

Stable Share Price: RFF is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: RFF's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
n/a	n/a	John Bryant	https://ruralfunds.com.au/rural-funds-group/

Rural Funds Group is an agricultural Real Estate Investment Trust (REIT) listed on the ASX under the code RFF. RFF owns a diversified portfolio of Australian agricultural assets which are leased predominantly to corporate agricultural operators. RFF targets distribution growth of 4% per annum by owning and improving farms that are leased to good counterparties.

Rural Funds Group Fundamentals Summary

How do Rural Funds Group's earnings and revenue compare to its market cap?
RFF fundamental statistics
Market Cap	AU$1.16b
Earnings (TTM)	AU$95.85m
Revenue (TTM)	AU$76.12m

12.1x

P/E Ratio

15.2x

P/S Ratio

Is RFF overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
RFF income statement (TTM)
Revenue	AU$76.12m
Cost of Revenue	AU$16.41m
Gross Profit	AU$59.71m
Other Expenses	-AU$36.14m
Earnings	AU$95.85m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.25
Gross Margin	78.45%
Net Profit Margin	125.92%
Debt/Equity Ratio	59.4%

How did RFF perform over the long term?

See historical performance and comparison

Dividends

3.9%

Current Dividend Yield

39%

Payout Ratio

New valuation analysis is now available for all ASX stocks. This is in beta.

Future Growth

How is Rural Funds Group forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

0.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: RFF's forecast earnings growth (0.2% per year) is below the savings rate (1.8%).

Earnings vs Market: RFF's earnings (0.2% per year) are forecast to grow slower than the Australian market (6.1% per year).

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

Revenue vs Market: RFF's revenue (10.2% per year) is forecast to grow faster than the Australian market (4.7% per year).

High Growth Revenue: RFF's revenue (10.2% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: RFF's Return on Equity is forecast to be low in 3 years time (6.1%).

Past Performance

How has Rural Funds Group performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

30.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: RFF has a large one-off gain of A$47.2M impacting its December 31 2021 financial results.

Growing Profit Margin: RFF's current net profit margins are higher than last year (99.7%).

Past Earnings Growth Analysis

Earnings Trend: RFF's earnings have grown significantly by 30.2% per year over the past 5 years.

Accelerating Growth: RFF's earnings growth over the past year (29.6%) is below its 5-year average (30.2% per year).

Earnings vs Industry: RFF earnings growth over the past year (29.6%) underperformed the REITs industry 215.6%.

Return on Equity

High ROE: RFF's Return on Equity (13%) is considered low.

Financial Health

How is Rural Funds Group's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: RFF's short term assets (A$24.9M) do not cover its short term liabilities (A$29.4M).

Long Term Liabilities: RFF's short term assets (A$24.9M) do not cover its long term liabilities (A$460.2M).

Debt to Equity History and Analysis

Debt Level: RFF's net debt to equity ratio (57.9%) is considered high.

Reducing Debt: RFF's debt to equity ratio has reduced from 80.6% to 59.4% over the past 5 years.

Debt Coverage: RFF's debt is not well covered by operating cash flow (7.5%).

Interest Coverage: RFF earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

Dividend

What is Rural Funds Group current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

3.87%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: RFF's dividend (3.87%) is higher than the bottom 25% of dividend payers in the Australian market (2.56%).

High Dividend: RFF's dividend (3.87%) is low compared to the top 25% of dividend payers in the Australian market (6.13%).

Stability and Growth of Payments

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

Growing Dividend: RFF's dividend payments have increased, but the company has only paid a dividend for 8 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (39.3%), RFF's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: RFF is paying a dividend but the company has no free cash flows.

Next Steps

Explore strong dividend paying companies in the Real Estate industry.

Management

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

3.8yrs

Average management tenure

CEO

John Bryant

no data

Tenure

Mr. David Anthony Bryant, also known as John, serves as the Managing Director of Rural Funds Management Limited, the responsible entity and manager of Rural Funds Group has been its Director since February...

Leadership Team

Experienced Management: RFF's management team is considered experienced (3.8 years average tenure).

Board Members

Experienced Board: RFF's board of directors are seasoned and experienced ( 12.1 years average tenure).

Ownership

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

Insider Trading Volume

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

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 12.5%.

Data	Last Updated (UTC time)
Company Analysis	2022/05/18 00:00
End of Day Share Price	2022/05/18 00:00
Earnings	2021/12/31
Annual Earnings	2021/06/30