TSX:REI.UN

Stock Analysis Report

RioCan Real Estate Investment Trust

Executive Summary

RioCan is one of Canada’s largest real estate investment trusts, with a total enterprise value of approximately $14.9 billion as at September 30, 2019.

Rewards

Trading at 24.5% below its fair value

Earnings grew by 32% over the past year

Pays a high and reliable dividend of 5.19%

Risk Analysis

Large one-off items impacting financial results



Snowflake Analysis

Undervalued established dividend payer.

Share Price & News

How has RioCan Real Estate Investment Trust's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: REI.UN has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.1%

REI.UN

1.6%

CA REITs

0.2%

CA Market


1 Year Return

10.1%

REI.UN

15.2%

CA REITs

4.9%

CA Market

Return vs Industry: REI.UN underperformed the Canadian REITs industry which returned 15.2% over the past year.

Return vs Market: REI.UN exceeded the Canadian Market which returned 4.9% over the past year.


Shareholder returns

REI.UNIndustryMarket
7 Day-0.1%1.6%0.2%
30 Day1.2%3.9%0.4%
90 Day3.9%7.4%3.7%
1 Year16.3%10.1%21.0%15.2%8.2%4.9%
3 Year22.5%3.2%46.4%23.9%15.9%5.5%
5 Year24.7%-5.1%65.0%24.6%33.8%14.3%

Price Volatility Vs. Market

How volatile is RioCan Real Estate Investment Trust's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is RioCan Real Estate Investment Trust undervalued compared to its fair value and its price relative to the market?

24.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: REI.UN (CA$27.72) is trading below our estimate of fair value (CA$36.7)

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


Price To Earnings Ratio

PE vs Industry: REI.UN is good value based on its PE Ratio (10.9x) compared to the REITs industry average (11x).

PE vs Market: REI.UN is good value based on its PE Ratio (10.9x) compared to the Canadian market (16x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: REI.UN is good value based on its PB Ratio (1.1x) compared to the CA REITs industry average (1.1x).


Next Steps

Future Growth

How is RioCan Real Estate Investment Trust forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

-1.3%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if REI.UN's forecast earnings growth is above the savings rate (1.4%).

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

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

Revenue vs Market: REI.UN's revenue is expected to decline over the next 3 years (-1.3% per year).

High Growth Revenue: REI.UN's revenue is forecast to decline over the next 3 years (-1.3% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

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


Next Steps

Past Performance

How has RioCan Real Estate Investment Trust performed over the past 5 years?

11.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: REI.UN has a large one-off gain of CA$246.1M impacting its September 30 2019 financial results.

Growing Profit Margin: REI.UN's current net profit margins (57.6%) are higher than last year (49.1%).


Past Earnings Growth Analysis

Earnings Trend: REI.UN's earnings have grown by 11.4% per year over the past 5 years.

Accelerating Growth: REI.UN's earnings growth over the past year (32%) exceeds its 5-year average (11.4% per year).

Earnings vs Industry: REI.UN earnings growth over the past year (32%) exceeded the REITs industry 9.2%.


Return on Equity

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


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is RioCan Real Estate Investment Trust'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: REI.UN has a high level of physical assets or inventory.

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


Financial Institutions Analysis

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

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

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

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

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

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


Next Steps

Dividend

What is RioCan Real Estate Investment Trust's current dividend yield, its reliability and sustainability?

5.19%

Current Dividend Yield


Dividend Yield vs Market

company5.2%marketbottom25%1.9%markettop25%5.3%industryaverage4.4%forecastin3Years5.2%

Current dividend yield vs market & industry

Notable Dividend: REI.UN's dividend (5.19%) is higher than the bottom 25% of dividend payers in the Canadian market (1.89%).

High Dividend: REI.UN's dividend (5.19%) is low compared to the top 25% of dividend payers in the Canadian market (5.31%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (77.4%), REI.UN's payments are covered by earnings.


Future Payout to Shareholders

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


Next Steps

Management

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

2.0yrs

Average management tenure


CEO

Ed Sonshine (72yo)

27.1yrs

Tenure

CA$6,706,961

Compensation

Mr. Edward Sonshine, also known as Ed, O.Ont., Q.C., B.A, LL.B, is the Founder of Riocan Real Estate Investment Trust and has been its Chief Executive Officer since 1993. Mr. Sonshine has been Advisor to t ...


CEO Compensation Analysis

Compensation vs Market: Ed's total compensation ($USD5.06M) is above average for companies of similar size in the Canadian market ($USD3.73M).

Compensation vs Earnings: Ed's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Edward Sonshine
CEO & Trustee27.1yrsCA$6.71m0.12% CA$10.8m
Jonathan Gitlin
President & COO0.9yrsCA$1.50m0.017% CA$1.5m
Qi Tang
Senior VP & CFO2.8yrsCA$1.20m0.0032% CA$277.4k
Jeff Ross
Senior Vice President of Leasing & Tenant Coordination12.1yrsCA$1.36m0.018% CA$1.6m
Ryan Donkers
Vice President of Investments1.6yrsno datano data
Kim Lee
Vice President of Investor Relations0.08yrsno datano data
Jennifer Suess
Senior VP2.5yrsno datano data
Terri Andrianopoulos
Vice President of Corporate Marketing & Communications2.3yrsno datano data
Sandra Levy
Vice President of Human Resources1.5yrsno datano data
Oliver Harrison
Senior Vice President of Operations0.8yrsno datano data

2.0yrs

Average Tenure

Experienced Management: REI.UN's management team is not considered experienced ( 2 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Edward Sonshine
CEO & Trustee27.1yrsCA$6.71m0.12% CA$10.8m
Siim Vanaselja
Independent Trustee2.8yrsCA$207.00kno data
Charles Winograd
Independent Trustee11yrsCA$198.50k0.0070% CA$619.1k
Dale Lastman
15.7yrsCA$176.50k0.0094% CA$829.6k
Paul Godfrey
Independent Chairman of the Board0yrsCA$375.00k0.054% CA$4.8m
Sharon Sallows
Independent Trustee20.7yrsCA$214.00k0.037% CA$3.3m
Richard Dansereau
Independent Trustee1.8yrsCA$164.50k0.0015% CA$129.5k
Bonnie Brooks
Independent Trustee6.7yrsCA$188.50kno data
S. Marshall
Independent Trustee4.7yrsCA$207.50k0.0053% CA$462.4k

8.8yrs

Average Tenure

66yo

Average Age

Experienced Board: REI.UN's board of directors are considered experienced (8.8 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if 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

RioCan Real Estate Investment Trust's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: RioCan Real Estate Investment Trust
  • Ticker: REI.UN
  • Exchange: TSX
  • Founded:
  • Industry: Retail REITs
  • Sector: Real Estate
  • Market Cap: CA$8.807b
  • Shares outstanding: 317.71m
  • Website: https://www.riocan.com

Number of Employees


Location

  • RioCan Real Estate Investment Trust
  • RioCan Yonge Eglinton Centre
  • Suite 500
  • Toronto
  • Ontario
  • M4P 1E4
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
REI.UNTSX (The Toronto Stock Exchange)YesTrust UnitsCACADJan 1994
R7GDB (Deutsche Boerse AG)YesTrust UnitsDEEURJan 1994
RIOC.FOTCPK (Pink Sheets LLC)YesTrust UnitsUSUSDJan 1994

Biography

RioCan is one of Canada’s largest real estate investment trusts, with a total enterprise value of approximately $14.9 billion as at September 30, 2019. RioCan owns, manages and develops retail-focused, increasingly mixed-use properties located in prime, high-density transit-oriented areas where Canadians want to shop, live and work. As at September 30, 2019, our portfolio is comprised of 225 properties with an aggregate net leasable area of approximately 39.3 million square feet including residential rental and 14 development properties as at September 30, 2019 (at RioCan's Interest). 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 00:11
End of Day Share Price2020/02/18 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


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.