NYSE:CLNC

Stock Analysis Report

Executive Summary

Colony Credit Real Estate, Inc. operates as a commercial real estate (CRE) credit real estate investment trust in the United States.

Risk Analysis

Currently unprofitable and not forecast to become profitable over the next 3 years

Dividend of 12.67% is not well covered by earnings

Shareholders have been diluted in the past year



Snowflake Analysis

Unattractive dividend payer and overvalued.


Similar Companies

Share Price & News

How has Colony Credit Real Estate's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

-1.3%

CLNC

1.5%

US Mortgage REITs

2.0%

US Market


1 Year Return

-18.3%

CLNC

4.8%

US Mortgage REITs

23.5%

US Market

Return vs Industry: CLNC underperformed the US Mortgage REITs industry which returned 4.4% over the past year.

Return vs Market: CLNC underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

CLNCIndustryMarket
7 Day-1.3%1.5%2.0%
30 Day-3.6%1.5%4.3%
90 Day-5.0%6.3%12.2%
1 Year-8.8%-18.3%16.3%4.8%26.1%23.5%
3 Yearn/a44.0%4.1%53.1%43.2%
5 Yearn/a68.5%-3.2%75.5%56.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Colony Credit Real Estate undervalued compared to its fair value and its price relative to the market?

0.81x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: Insufficient data to calculate CLNC's fair value to establish if it is undervalued.

Significantly Below Fair Value: Insufficient data to calculate CLNC's fair value to establish if it is undervalued.


Price To Earnings Ratio

PE vs Industry: CLNC is unprofitable, so we can't compare its PE Ratio to the Mortgage REITs industry average.

PE vs Market: CLNC is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: CLNC is good value based on its PB Ratio (0.8x) compared to the US Mortgage REITs industry average (1x).


Next Steps

Future Growth

How is Colony Credit Real Estate forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

145.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CLNC is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: CLNC is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: CLNC is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: CLNC's revenue is expected to decline over the next 3 years (-2.8% per year).

High Growth Revenue: CLNC's revenue is forecast to decline over the next 3 years (-2.8% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

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


Next Steps

Past Performance

How has Colony Credit Real Estate performed over the past 5 years?

-94.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CLNC is currently unprofitable.

Growing Profit Margin: CLNC is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: CLNC is unprofitable, and losses have increased over the past 5 years at a rate of -94.1% per year.

Accelerating Growth: Unable to compare CLNC's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: CLNC is unprofitable, making it difficult to compare its past year earnings growth to the Mortgage REITs industry (0.1%).


Return on Equity

High ROE: CLNC has a negative Return on Equity (-28.52%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Colony Credit Real Estate'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: CLNC has a high level of physical assets or inventory.

Debt Coverage by Assets: CLNC's debt is not covered by short term assets (assets are 0.6x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable CLNC has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: CLNC is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 17.5% per year.


Financial Institutions Analysis

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

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

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

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

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

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


Next Steps

Dividend

What is Colony Credit Real Estate's current dividend yield, its reliability and sustainability?

12.99%

Current Dividend Yield


Dividend Yield vs Market

company13.0%marketbottom25%1.4%markettop25%3.7%industryaverage9.7%forecastin3Years9.0%

Current dividend yield vs market & industry

Notable Dividend: CLNC's dividend (12.67%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: CLNC's dividend (12.67%) is in the top 25% of dividend payers in the US market (3.66%)


Stability and Growth of Payments

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

Growing Dividend: CLNC has only been paying a dividend for 2 years, and since then payments have not increased.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (149.5%), CLNC's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of Colony Credit Real Estate's salary, the management and board of directors tenure and is there insider trading?

1.3yrs

Average management tenure


CEO

Kevin Traenkle (49yo)

2yrs

Tenure

US$1,137,980

Compensation

Mr. Kevin P. Traenkle is the Chief Executive Officer, Director and President of the Colony NorthStar Credit Real Estate, Inc. since January 29, 2018. He has been the Chief Investment Officer of Colony Capi ...


Management Age and Tenure

1.3yrs

Average Tenure

50.5yo

Average Age

Experienced Management: CLNC's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Age and Tenure

2.0yrs

Average Tenure

59yo

Average Age

Experienced Board: CLNC's board of directors are not considered experienced ( 2 years average tenure), which suggests a new board.


Insider Trading

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


Recent Insider Transactions

BuyUS$300,00013 Nov 19
David Palamé
EntityIndividual
Role
Chief Legal Officer
General Counsel & Secretary
Shares25,000
Max PriceUS$12.00
BuyUS$1,054,80013 Nov 19
Darren Tangen
EntityIndividual
Role
Member of the Board of Directors
Director
Shares90,000
Max PriceUS$11.72
BuyUS$1,193,00013 Nov 19
Kevin Traenkle
EntityIndividual
Role
Chief Executive Officer
CEO, President & Director
Shares100,000
Max PriceUS$11.95
BuyUS$49,47013 Nov 19
Neale Redington
EntityIndividual
Role
Chief Financial Officer
CFO & Treasurer
Shares4,250
Max PriceUS$11.64
BuyUS$286,11013 Nov 19
Kevin Traenkle
EntityIndividual
Role
Chief Executive Officer
CEO, President & Director
Shares22,000
Max PriceUS$13.05
BuyUS$64,25013 Nov 19
David Palamé
EntityIndividual
Role
Chief Legal Officer
General Counsel & Secretary
Shares5,000
Max PriceUS$12.85

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 28.5%.


Management Team

  • Kevin Traenkle (49yo)

    CEO, President & Director

    • Tenure: 2yrs
    • Compensation: US$1.14m
  • Frank Saracino (52yo)

    Chief Accounting Officer

    • Tenure: 1.2yrs
  • Neale Redington (52yo)

    CFO & Treasurer

    • Tenure: 1.2yrs
    • Compensation: US$295.60k
  • David Palamé (42yo)

    General Counsel & Secretary

    • Tenure: 2yrs
    • Compensation: US$248.37k
  • Daniel Katz

    Managing Director

    • Kevin Swartz

      Managing Director

      • Tenure: 1.3yrs

    Board Members

    • Katy Rice (59yo)

      Lead Independent Director

      • Compensation: US$212.23k
    • Richard Saltzman (62yo)

      Non-Executive Chairman

      • Tenure: 2yrs
      • Compensation: US$12.00k
    • Kevin Traenkle (49yo)

      CEO, President & Director

      • Tenure: 2yrs
      • Compensation: US$1.14m
    • Vernon Schwartz (69yo)

      Independent Director

      • Tenure: 2yrs
      • Compensation: US$207.65k
    • Darren Tangen (48yo)

      Director

      • Tenure: 2yrs
    • Winston Wilson (51yo)

      Independent Director

      • Tenure: 2yrs
      • Compensation: US$212.23k
    • John Westerfield (60yo)

      Independent Director

      • Tenure: 2yrs
      • Compensation: US$207.65k

    Company Information

    Colony Credit Real Estate, Inc.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Colony Credit Real Estate, Inc.
    • Ticker: CLNC
    • Exchange: NYSE
    • Founded: 2017
    • Industry: Mortgage REITs
    • Sector: Diversified Financials
    • Implied Market Cap: US$1.812b
    • Market Cap: US$1.722b
    • Shares outstanding: 131.61m
    • Website: https://www.clncredit.com

    Location

    • Colony Credit Real Estate, Inc.
    • 515 South Flower Street
    • 44th Floor
    • Los Angeles
    • California
    • 90071
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    CLNCNYSE (New York Stock Exchange)YesClass A Common StockUSUSDFeb 2018

    Biography

    Colony Credit Real Estate, Inc. operates as a commercial real estate (CRE) credit real estate investment trust in the United States. It focuses on originating, acquiring, financing, and managing a portfolio of CRE senior mortgage loans, mezzanine loans, preferred equity, debt securities, and net leased properties. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was formerly known as Colony NorthStar Credit Real Estate, Inc. and changed its name to Colony Credit Real Estate, Inc. in June 2018. Colony Credit Real Estate, Inc. was founded in 2017 and is headquartered in Los Angeles, California. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/18 00:45
    End of Day Share Price2020/01/17 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.