Killam Apartment REIT (TSX:KMP.UN) - Share price, News & Analysis

Q: What is the Fair Price of KMP.UN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

KMP.UN (CA$17.14) is trading below our estimate of [[fair value]] (CA$23.75)

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

KMP.UN Stock Overview

Rewards

Trading at 27.8% below our estimate of its fair value

Revenue is forecast to grow 7.88% per year

Earnings have grown 21.9% per year over the past 5 years

Risk Analysis

Debt is not well covered by operating cash flow

Dividend of 4.08% is not well covered by earnings or forecast to be in the next 3 years

Large one-off items impacting financial results

Shareholders have been diluted in the past year

Killam Apartment REIT Competitors

Boardwalk Real Estate Investment Trust

TSX:BEI.UN

CA$2.1b

InterRent Real Estate Investment Trust

TSX:IIP.UN

CA$1.8b

Minto Apartment Real Estate Investment Trust

TSX:MI.UN

CA$917.3m

BSR Real Estate Investment Trust

TSX:HOM.UN

CA$1.1b

Price History & Performance

Summary of all time highs, changes and price drops for Killam Apartment REIT
Historical stock prices
Current Share Price	CA$17.14
52 Week High	CA$24.15
52 Week Low	CA$16.48
Beta	0.89
1 Month Change	-9.98%
3 Month Change	-21.88%
1 Year Change	-15.02%
3 Year Change	-8.78%
5 Year Change	34.54%
Change since IPO	2,042.50%

Shareholder Returns

	KMP.UN	CA REITs	CA Market
7D	0.8%	0.8%	0.1%
1Y	-15.0%	-11.6%	-2.6%

Return vs Industry: KMP.UN underperformed the Canadian REITs industry which returned -11.7% over the past year.

Return vs Market: KMP.UN underperformed the Canadian Market which returned -4% over the past year.

Price Volatility

Is KMP.UN's price volatile compared to industry and market?
KMP.UN volatility
KMP.UN Average Weekly Movement	3.7%
REITs Industry Average Movement	3.8%
Market Average Movement	10.0%
10% most volatile stocks in CA Market	17.3%
10% least volatile stocks in CA Market	4.4%

Stable Share Price: KMP.UN is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: KMP.UN's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2000	n/a	Philip Fraser	https://www.killamreit.com

Killam Apartment REIT, based in Halifax, Nova Scotia, is one of Canada's largest residential landlords, owning, operating, managing and developing a $3.6 billion portfolio of apartments and manufactured home communities. Killam's strategy to enhance value and profitability focuses on three priorities: 1) increasing earnings from existing operations, 2) expanding the portfolio and diversifying geographically through accretive acquisitions, with an emphasis on newer properties, and 3) developing high-quality properties in its core markets.

Killam Apartment REIT Fundamentals Summary

How do Killam Apartment REIT's earnings and revenue compare to its market cap?
KMP.UN fundamental statistics
Market Cap	CA$2.05b
Earnings (TTM)	CA$318.12m
Revenue (TTM)	CA$302.21m

6.2x

P/E Ratio

6.6x

P/S Ratio

Is KMP.UN overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
KMP.UN income statement (TTM)
Revenue	CA$302.21m
Cost of Revenue	CA$112.77m
Gross Profit	CA$189.44m
Other Expenses	-CA$128.68m
Earnings	CA$318.12m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Jun 30, 2022

Earnings per share (EPS)	2.75
Gross Margin	62.68%
Net Profit Margin	105.26%
Debt/Equity Ratio	89.7%

How did KMP.UN perform over the long term?

See historical performance and comparison

Dividends

4.1%

Current Dividend Yield

1,489%

Payout Ratio

Does KMP.UN pay a reliable dividends?

See KMP.UN dividend history and benchmarks

When do you need to buy KMP.UN by to receive an upcoming dividend?
Killam Apartment REIT dividend dates
Ex Dividend Date	Jun 29 2022
Dividend Pay Date	Jul 15 2022
Days until Ex dividend	1 day
Days until Dividend pay date	17 days

Does KMP.UN pay a reliable dividends?

See KMP.UN dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is KMP.UN undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for KMP.UN?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for KMP.UN. This is calculated by dividing KMP.UN's market cap by their current preferred multiple.
What is KMP.UN's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CA$2.05b

KMP.UN key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	13.3x
Enterprise Value/EBITDA	23.3x
PEG Ratio	n/a

Price to Earnings Ratio vs Peers

How does KMP.UN's PE Ratio compare to its peers?

KMP.UN PE Ratio vs Peers

The above table shows the PE ratio for KMP.UN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	3.7x
BEI.UN Boardwalk Real Estate Investment Trust	4x	n/a	CA$2.1b
IIP.UN InterRent Real Estate Investment Trust	4.8x	n/a	CA$1.8b
MI.UN Minto Apartment Real Estate Investment Trust	3.9x	n/a	CA$917.3m
HOM.UN BSR Real Estate Investment Trust	2x	-95.7%	CA$1.1b
KMP.UN Killam Apartment REIT	6.2x	n/a	CA$2.1b

Forward PE

Price-To-Earnings vs Peers: KMP.UN is expensive based on its Price-To-Earnings Ratio (6.2x) compared to the peer average (3.7x).

Price to Earnings Ratio vs Industry

How does KMP.UN's PE Ratio compare vs other companies in the CA REITs Industry?

Price-To-Earnings vs Industry: KMP.UN is expensive based on its Price-To-Earnings Ratio (6.2x) compared to the Canadian REITs industry average (4.8x)

Price to Earnings Ratio vs Fair Ratio

What is KMP.UN's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

KMP.UN PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	6.2x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate KMP.UN's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of KMP.UN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: KMP.UN (CA$17.14) is trading below our estimate of fair value (CA$23.75)

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

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate KMP.UN's PEG Ratio to determine if it is good value.

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Future Growth

How is Killam Apartment REIT forecast to perform in the next 1 to 3 years based on estimates from 6 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

7.9%

Forecasted annual revenue growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if KMP.UN's forecast earnings growth is above the savings rate (1.6%).

Earnings vs Market: Insufficient data to determine if KMP.UN's earnings are forecast to grow faster than the Canadian market

High Growth Earnings: Insufficient data to determine if KMP.UN's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: KMP.UN's revenue (7.9% per year) is forecast to grow faster than the Canadian market (6.9% per year).

High Growth Revenue: KMP.UN's revenue (7.9% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if KMP.UN's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Killam Apartment REIT performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

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

21.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: KMP.UN has a large one-off gain of CA$253.9M impacting its March 31 2022 financial results.

Growing Profit Margin: KMP.UN's current net profit margins are higher than last year (50.6%).

Past Earnings Growth Analysis

Earnings Trend: KMP.UN's earnings have grown significantly by 21.9% per year over the past 5 years.

Accelerating Growth: KMP.UN's earnings growth over the past year (135.7%) exceeds its 5-year average (21.9% per year).

Earnings vs Industry: KMP.UN earnings growth over the past year (135.7%) underperformed the REITs industry 163.2%.

Return on Equity

High ROE: KMP.UN's Return on Equity (14.1%) is considered low.

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Financial Health

How is Killam Apartment REIT'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: KMP.UN's short term assets (CA$32.2M) do not cover its short term liabilities (CA$426.3M).

Long Term Liabilities: KMP.UN's short term assets (CA$32.2M) do not cover its long term liabilities (CA$2.0B).

Debt to Equity History and Analysis

Debt Level: KMP.UN's net debt to equity ratio (89.5%) is considered high.

Reducing Debt: KMP.UN's debt to equity ratio has reduced from 132.1% to 89.7% over the past 5 years.

Debt Coverage: KMP.UN's debt is not well covered by operating cash flow (6.8%).

Interest Coverage: KMP.UN's interest payments on its debt are well covered by EBIT (3.3x coverage).

Balance Sheet

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Dividend

What is Killam Apartment REIT 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

4.08%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: KMP.UN's dividend (4.08%) is higher than the bottom 25% of dividend payers in the Canadian market (2.03%).

High Dividend: KMP.UN's dividend (4.08%) is low compared to the top 25% of dividend payers in the Canadian market (5.33%).

Stability and Growth of Payments

Stable Dividend: KMP.UN's dividends per share have been stable in the past 10 years.

Growing Dividend: KMP.UN's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (1488.9%), KMP.UN's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (141.1%), KMP.UN's dividend payments are not well covered by cash flows.

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Management

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

12.2yrs

Average management tenure

CEO

Philip Fraser (59 yo)

22.08yrs

Tenure

CA$2,257,546

Compensation

Mr. Philip D. Fraser, B.Comm, MURP, MBA, has been Chief Executive Officer and Founding President at Killam Apartment Real Estate Investment Trust since May 2000 and serves as a Trustee since May 26, 2000....

CEO Compensation Analysis

Compensation vs Market: Philip's total compensation ($USD1.75M) is about average for companies of similar size in the Canadian market ($USD2.40M).

Compensation vs Earnings: Philip's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: KMP.UN's management team is seasoned and experienced (12.2 years average tenure).

Board Members

Experienced Board: KMP.UN's board of directors are seasoned and experienced ( 15.1 years average tenure).

Ownership

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

Insider Trading Volume

Insider Buying: KMP.UN 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 5.3%.

Data	Last Updated (UTC time)
Company Analysis	2022/06/27 00:00
End of Day Share Price	2022/06/27 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31