Varia US Properties (SWX:VARN) - Share price, News & Analysis

VARN fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	1/6
Past Performance	4/6
Financial Health	1/6
Dividends	4/6

VARN Stock Overview

Varia US Properties AG, a real estate investment company, acquires, holds, and sells properties in the United States.

Rewards

Trading at 56.5% below our estimate of its fair value

Revenue is forecast to grow 11.98% per year

Earnings grew by 339.3% over the past year

Risk Analysis

Interest payments are not well covered by earnings

Unstable dividend track record

Large one-off items impacting financial results

Varia US Properties Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Varia US Properties
Historical stock prices
Current Share Price	CHF50.80
52 Week High	CHF58.00
52 Week Low	CHF37.50
Beta	0.25
1 Month Change	-5.93%
3 Month Change	0.79%
1 Year Change	34.39%
3 Year Change	36.93%
5 Year Change	21.39%
Change since IPO	45.14%

Shareholder Returns

	VARN	CH Real Estate	CH Market
7D	2.4%	1.3%	-2.8%
1Y	34.4%	2.7%	-2.4%

Return vs Industry: VARN exceeded the Swiss Real Estate industry which returned 2.7% over the past year.

Return vs Market: VARN exceeded the Swiss Market which returned -2.4% over the past year.

Price Volatility

Is VARN's price volatile compared to industry and market?
VARN volatility
VARN Average Weekly Movement	3.7%
Real Estate Industry Average Movement	2.9%
Market Average Movement	4.9%
10% most volatile stocks in CH Market	8.9%
10% least volatile stocks in CH Market	2.5%

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

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

About the Company

Founded	Employees	CEO	Website
2015	n/a	Patrick Richard	https://variausproperties.com

Varia US Properties AG, a real estate investment company, acquires, holds, and sells properties in the United States. The company invests in low-moderate income and workforce multifamily housing properties. Varia US Properties AG was founded in 2015 and is based in Zug, Switzerland.

Varia US Properties Fundamentals Summary

How do Varia US Properties's earnings and revenue compare to its market cap?
VARN fundamental statistics
Market Cap	US$527.29m
Earnings (TTM)	US$156.01m
Revenue (TTM)	US$120.99m

3.4x

P/E Ratio

4.4x

P/S Ratio

Is VARN overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
VARN income statement (TTM)
Revenue	US$120.99m
Cost of Revenue	US$56.48m
Gross Profit	US$64.50m
Other Expenses	-US$91.51m
Earnings	US$156.01m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

Aug 29, 2022

Earnings per share (EPS)	15.41
Gross Margin	53.31%
Net Profit Margin	128.95%
Debt/Equity Ratio	170.0%

How did VARN perform over the long term?

See historical performance and comparison

Dividends

4.8%

Current Dividend Yield

18%

Payout Ratio

Valuation

Is Varia US Properties undervalued compared to its fair value and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

>50%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: VARN (CHF50.8) is trading below our estimate of fair value (CHF116.82)

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

Price To Earnings Ratio

PE vs Industry: VARN is good value based on its PE Ratio (3.4x) compared to the Swiss Real Estate industry average (12.6x).

PE vs Market: VARN is good value based on its PE Ratio (3.4x) compared to the Swiss market (17.9x).

Price to Earnings Growth Ratio

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

Price to Book Ratio

PB vs Industry: VARN's PB Ratio (1x) is in line with the CH Real Estate industry average.

Future Growth

How is Varia US Properties forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

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

12.0%

Forecasted annual revenue growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if VARN's forecast earnings growth is above the savings rate (-0.3%).

Earnings vs Market: Insufficient data to determine if VARN's earnings are forecast to grow faster than the Swiss market

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

Revenue vs Market: VARN's revenue (12% per year) is forecast to grow faster than the Swiss market (4.3% per year).

High Growth Revenue: VARN's revenue (12% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: VARN's Return on Equity is forecast to be low in 3 years time (11.1%).

Past Performance

How has Varia US Properties performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

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

41.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: VARN has a large one-off gain of $196.2M impacting its December 31 2021 financial results.

Growing Profit Margin: VARN's current net profit margins are higher than last year (32.4%).

Past Earnings Growth Analysis

Earnings Trend: VARN's earnings have grown significantly by 41.4% per year over the past 5 years.

Accelerating Growth: VARN's earnings growth over the past year (339.3%) exceeds its 5-year average (41.4% per year).

Earnings vs Industry: VARN earnings growth over the past year (339.3%) exceeded the Real Estate industry 61.3%.

Return on Equity

High ROE: Whilst VARN's Return on Equity (30.33%) is high, this metric is skewed due to their high level of debt.

Financial Health

How is Varia US Properties's financial position?

Financial Health Score

1/6

Financial Health Score 1/6

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

Financial Position Analysis

Short Term Liabilities: VARN's short term assets ($86.3M) exceed its short term liabilities ($41.9M).

Long Term Liabilities: VARN's short term assets ($86.3M) do not cover its long term liabilities ($949.1M).

Debt to Equity History and Analysis

Debt Level: VARN's net debt to equity ratio (154.4%) is considered high.

Reducing Debt: VARN's debt to equity ratio has increased from 90.4% to 170% over the past 5 years.

Debt Coverage: VARN's debt is not well covered by operating cash flow (5%).

Interest Coverage: VARN's interest payments on its debt are not well covered by EBIT (1.7x coverage).

Balance Sheet

Dividend

What is Varia US Properties's current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

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

4.78%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: VARN's dividend (4.78%) is higher than the bottom 25% of dividend payers in the Swiss market (1.87%).

High Dividend: VARN's dividend (4.78%) is in the top 25% of dividend payers in the Swiss market (3.91%)

Stability and Growth of Payments

Stable Dividend: VARN has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: VARN's dividend payments have increased, but the company has only paid a dividend for 5 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (17.8%), VARN's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (57.2%), VARN's dividend payments are covered by cash flows.

Discover strong dividend paying companies

Management

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

0.3yrs

Average management tenure

CEO

Patrick Richard (50 yo)

no data

Tenure

US$82,272

Compensation

Mr. Patrick Richard Founded Stoneweg US LLC, an asset manager of Varia US Properties AG and serves as its member of the Board of Directors since 2016 and also serves as its Chief Executive Officer since 20...

Leadership Team

Experienced Management: VARN's management team is not considered experienced ( 0.3 years average tenure), which suggests a new team.

Board Members

Experienced Board: VARN's board of directors are considered experienced (6.3 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.

Ownership Breakdown

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

Data	Last Updated (UTC time)
Company Analysis	2022/05/22 00:00
End of Day Share Price	2022/05/20 00:00
Earnings	2021/12/31
Annual Earnings	2021/12/31