| Snowflake Score | |
|---|---|
| Valuation | 4/6 |
| Future Growth | 0/6 |
| Past Performance | 3/6 |
| Financial Health | 2/6 |
| Dividends | 4/6 |
ROIC Stock Overview
Retail Opportunity Investments Corp. (NASDAQ: ROIC), is a fully-integrated, self-managed real estate investment trust (REIT) that specializes in the acquisition, ownership and management of grocery-anchored shopping centers located in densely populated, metropolitan markets across the West Coast.
Retail Opportunity Investments Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$14.09 |
| 52 Week High | US$20.09 |
| 52 Week Low | US$13.68 |
| Beta | 1.37 |
| 1 Month Change | -17.94% |
| 3 Month Change | -10.71% |
| 1 Year Change | -20.80% |
| 3 Year Change | -22.52% |
| 5 Year Change | -26.00% |
| Change since IPO | 54.33% |
Recent News & Updates
Retail Opportunity Investments Corp.: Limited Opportunities For Further Growth
Summary ROIC is a REIT exclusively focused on the West Coast of the U.S., with a portfolio of necessity-based community and neighborhood shopping centers. The company is posting record leasing statistics and has achieved an overall occupancy rate that is on par with the levels last attained prior to 2020. Essentially full occupancy levels combined with a slowing acquisition environment will require the company to continue building on rental rate growth, which may be a formidable challenge. While a quality holding for existing shareholders, new investors may be better off waiting for fresh figures from their Q3 earnings release before initiating any new positions in the stock. Retail Opportunity Investments Corp (ROIC) is a real estate investment trust (“REIT”) whose operations are geographically concentrated on the West Coast of the United States. Their properties are principally necessity-based community and neighborhood shopping centers, anchored by supermarkets and drugstores. The company has a current market cap of approximately +$2.0B, which is comparable to other retail-related REITS within the sector, such as Urban Edge Properties (UE), SITE Centers Corp. (SITC), and Phillips Edison & Company, Inc (PECO), to name a few. Over the past year, ROIC has fared better than their peers, though they are still down 15% on the year and about 25% YTD. Seeking Alpha - Total Returns Of ROIC Compared To Competitors Presently, like many other names, shares are trading at new 52-week lows. While shares have recovered much of their losses incurred in 2020, they still trade at a discount to their pre-pandemic trading levels, at 13x forward funds from operations (“FFO”) versus 16x at the end of 2019. This is despite occupancy levels that are essentially on par with the 2019 benchmark. YCharts - ROIC Share Price History Compared to their peers, ROIC does trade at a premium. While their quality portfolio and strong operating presence in a high-barrier-to-entry market may warrant a higher valuation, it may not be compelling enough to court prospective investors seeking to deploy limited capital in an environment with elevated buying opportunities. A slowing environment for external growth combined with limited organic opportunities may also weigh on future earnings potential. While the stock is a quality hold for existing shareholders, new investors may find it best to hold off on directing new capital into the stock until the release of their next earnings report. ROIC Has A Portfolio Concentrated Exclusively On The West Coast ROIC’s portfolio is comprised of 92 shopping centers exclusively located on the West Coast of the U.S. About 60% of this portfolio is concentrated within four major regions of California, with the remainder located in Seattle, Washington and Portland, Oregon. Q2FY22 Investor Supplement - Portfolio Concentration By Geographic Segment A solidified operating presence along the West Coast region provides the company with several competitive advantages, one of which is the barriers to entry in the market, which limits the competition pool. Even when there are new entrants, greater scarcity of supply and complicated regulations constrain their ability to encroach on ROIC’s market share. Navigation through these difficult-to-enter markets is facilitated by a management team with over 25 years of experience working in the market. This provides an extensive network of relationships with key stakeholders involved in daily business activities. ROIC’s markets are also characterized by their favorable demographics, which includes densely populated communities with above-average household incomes. This limits volatility through changing business cycles and provides further durability to their tenants’ cash flows, which, as it is, are already inherently protected due to the essential nature of their goods and services. A Focus On The Essentials As experienced throughout the COVID-19 pandemic, supermarkets and value retailers providing basic goods and services are always in demand and the least likely to shut down for reasons beyond their control. Among their top ten tenants are some of the most stable, necessity-based drug/grocery stores and retailers, including Albertsons (ACI), Kroger (KR), and The TJX Companies (TJX), to name a few. Collectively, their overall top ten accounts for less than 20% of annualized base rents (“ABR”), with ACI the only single tenant representing over 5% of total ABR on its own. Q2FY22 Investor Supplement - Summary Of Top 10 Tenants Compared to their peer set, ROIC’s exposure to grocery and/or drug stores is among the highest in the sector, with 97% of their portfolio anchored by one or the other. This level of exposure compensates for the overall size of their portfolio, which lacks scale and geographic diversification outside of the West Coast region. A Likely Slowdown In Growth Opportunities Expansion outside of the core operating markets is unlikely. As such, future earnings growth will be dependent upon either organic growth through ongoing leasing and redevelopment activities or additional acquisitions in their current markets. The latter may prove more challenging due to the uncertainties in the current market environment, which is resulting in longer negotiations amid wider bid/ask spreads. If there is in fact a slowdown in the acquisition environment, ROIC would most likely end the year having completed +$120M in total acquisitions and +$70M in dispositions. This would be on the low end of their target range and would correlate with an annual FFO of $1.08/per diluted share, as reflected on management’s revised guidance range. If the environment remains robust, on the other hand, ROIC could potentially acquire an additional +$80M of properties. This would drive FFO closer to $1.12/share, which is on the high end of their targeted range. Given additional uncertainties since their release, however, it’s more likely the company will come in on the low end of the spectrum. Q2FY22 Earnings Release - 2022 Full-Year Guidance Organically, the portfolio appears to be at a peak, with same-center occupancy now at nearly 98%, which is on par with their record high lease rate achieved prior to the start of the pandemic. Barring external growth, this leaves very little upside in improving upon record occupancy levels. Q2FY22 Investor Supplement - Same-Center Cash NOI Summary Additionally, during the most recent quarter ended June 30, 2022, the company leased more space than what was originally set to expire. In total, they leased nearly 300k square feet (“SF”) of space during the quarter and 700k SF through H1, which was more than their previous record last set in 2019. Furthermore, much of the activity centered on tenant renewals, with many tenants coming to the company earlier than their initially scheduled expiration date. And, moreover, these tenants, in particular the shops, sought terms as high as ten years, which seems odd since their shop tenants have historically signed shorter-term leases with five-year terms on average. One reason may be due to the poor outlook on available supply in the region. At any rate, ROIC has capitalized on this heightened level of demand by achieving spreads of 10.5% on renewals, which is higher than their historical average. Looking ahead, however, it wouldn’t be unreasonable to forecast a slowdown in rental rate growth. While peak occupancy levels are likely to keep rents higher than historical averages, double-digit spreads are likely to become increasingly harder to come by in subsequent periods. More Levered Than Peers But Still Financially Sound ROIC’s quality portfolio metrics is offset by a debt load that is relatively higher than their peer set. At 6.7x annualized EBITDA, net debt is still within reason to maintain investment grade credit ratings from all three reporting agencies. But it is higher than their peer group, whose multiples generally track below 6.0x. In addition, the company has a shorter debt ladder, with most of their maturities due prior to 2027. A principally unencumbered portfolio with effectively fully-fixed-rate debt compensates for this by reducing the company’s exposure to volatile interest rate environments. There is also ample availability on the revolving credit facility to meet their reoccurring obligations in the interim to maturity. Q2FY22 Investor Presentation - Debt Maturity Schedule Nevertheless, the higher debt burden does limit flexibility and increases the appeal of utilizing the ATM program, which provides an additional source of funding but dilutes future earnings potential at the same time.
Retail Opportunity Investments goes ex-dividend tomorrow
Retail Opportunity Investments (NASDAQ:ROIC) declared $0.13/share quarterly dividend, in line with previous. Payable Oct. 7; for shareholders of record Sept. 16; ex-div Sept. 15. See ROIC Dividend Scorecard, Yield Chart, & Dividend Growth.
If EPS Growth Is Important To You, Retail Opportunity Investments (NASDAQ:ROIC) Presents An Opportunity
For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to...
Shareholder Returns
| ROIC | US REITs | US Market | |
|---|---|---|---|
| 7D | -7.7% | -4.5% | -2.0% |
| 1Y | -20.8% | -19.2% | -20.3% |
Return vs Industry: ROIC matched the US REITs industry which returned -20.4% over the past year.
Return vs Market: ROIC exceeded the US Market which returned -22.1% over the past year.
Price Volatility
| ROIC volatility | |
|---|---|
| ROIC Average Weekly Movement | 3.9% |
| REITs Industry Average Movement | 3.9% |
| Market Average Movement | 6.9% |
| 10% most volatile stocks in US Market | 15.8% |
| 10% least volatile stocks in US Market | 2.8% |
Stable Share Price: ROIC is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.
Volatility Over Time: ROIC's weekly volatility (4%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| n/a | 68 | Stuart Tanz | https://www.roireit.net |
Retail Opportunity Investments Corp. (NASDAQ: ROIC), is a fully-integrated, self-managed real estate investment trust (REIT) that specializes in the acquisition, ownership and management of grocery-anchored shopping centers located in densely populated, metropolitan markets across the West Coast. As of September 30, 2020, ROIC owned 88 shopping centers encompassing approximately 10.1 million square feet. ROIC is the largest publicly-traded, grocery-anchored shopping center REIT focused exclusively on the West Coast.
Retail Opportunity Investments Fundamentals Summary
| ROIC fundamental statistics | |
|---|---|
| Market Cap | US$1.87b |
| Earnings (TTM) | US$52.38m |
| Revenue (TTM) | US$298.88m |
33.5x
P/E Ratio5.9x
P/S RatioIs ROIC overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| ROIC income statement (TTM) | |
|---|---|
| Revenue | US$298.88m |
| Cost of Revenue | US$81.54m |
| Gross Profit | US$217.34m |
| Other Expenses | US$164.96m |
| Earnings | US$52.38m |
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
Oct 25, 2022
| Earnings per share (EPS) | 0.42 |
| Gross Margin | 72.72% |
| Net Profit Margin | 17.53% |
| Debt/Equity Ratio | 97.4% |
How did ROIC perform over the long term?
See historical performance and comparisonDividends
4.3%
Current Dividend Yield48%
Payout RatioValuation
Is ROIC undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score
4/6Valuation Score 4/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast
Key Valuation Metric
Which metric is best to use when looking at relative valuation for ROIC?
Other financial metrics that can be useful for relative valuation.
| What is ROIC's n/a Ratio? | |
|---|---|
| n/a Ratio | 0x |
| n/a | n/a |
| Market Cap | US$1.87b |
| Key Statistics | |
|---|---|
| Enterprise Value/Revenue | 10.7x |
| Enterprise Value/EBITDA | 17.4x |
| PEG Ratio | -6.8x |
Price to Earnings Ratio vs Peers
How does ROIC's PE Ratio compare to its peers?
| ROIC PE Ratio vs Peers |
|---|
| Company | PE | Estimated Growth | Market Cap |
|---|---|---|---|
| Peer Average | 34x | ||
UE Urban Edge Properties | 17.7x | 1.5% | US$1.7b |
MAC Macerich | 48.5x | 41.4% | US$1.8b |
IVT InvenTrust Properties | 34.4x | -105.4% | US$1.5b |
SKT Tanger Factory Outlet Centers | 35.5x | 8.1% | US$1.6b |
ROIC Retail Opportunity Investments | 33.5x | -4.9% | US$1.9b |
Price-To-Earnings vs Peers: ROIC is good value based on its Price-To-Earnings Ratio (33.5x) compared to the peer average (34x).
Price to Earnings Ratio vs Industry
How does ROIC's PE Ratio compare vs other companies in the US REITs Industry?
Price-To-Earnings vs Industry: ROIC is expensive based on its Price-To-Earnings Ratio (33.5x) compared to the US REITs industry average (26x)
Price to Earnings Ratio vs Fair Ratio
What is ROIC'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.
| Fair Ratio | |
|---|---|
| Current PE Ratio | 33.5x |
| Fair PE Ratio | 27.7x |
Price-To-Earnings vs Fair Ratio: ROIC is expensive based on its Price-To-Earnings Ratio (33.5x) compared to the estimated Fair Price-To-Earnings Ratio (27.7x).
Share Price vs Fair Value
What is the Fair Price of ROIC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: ROIC ($14.09) is trading below our estimate of fair value ($25.08)
Significantly Below Fair Value: ROIC is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.
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Future Growth
How is Retail Opportunity Investments forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?
Future Growth Score
0/6Future Growth Score 0/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE
-4.9%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: ROIC's earnings are forecast to decline over the next 3 years (-4.9% per year).
Earnings vs Market: ROIC's earnings are forecast to decline over the next 3 years (-4.9% per year).
High Growth Earnings: ROIC's earnings are forecast to decline over the next 3 years.
Revenue vs Market: ROIC's revenue (3.3% per year) is forecast to grow slower than the US market (7.6% per year).
High Growth Revenue: ROIC's revenue (3.3% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: ROIC's Return on Equity is forecast to be low in 3 years time (4.5%).
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Past Performance
How has Retail Opportunity Investments performed over the past 5 years?
Past Performance Score
3/6Past Performance Score 3/6
Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE
5.2%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: ROIC has a large one-off gain of $12.9M impacting its June 30 2022 financial results.
Growing Profit Margin: ROIC's current net profit margins (17.5%) are higher than last year (13.8%).
Past Earnings Growth Analysis
Earnings Trend: ROIC's earnings have grown by 5.2% per year over the past 5 years.
Accelerating Growth: ROIC's earnings growth over the past year (33.9%) exceeds its 5-year average (5.2% per year).
Earnings vs Industry: ROIC earnings growth over the past year (33.9%) underperformed the REITs industry 45.8%.
Return on Equity
High ROE: ROIC's Return on Equity (4.1%) is considered low.
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Financial Health
How is Retail Opportunity Investments's financial position?
Financial Health Score
2/6Financial Health Score 2/6
Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage
Financial Position Analysis
Short Term Liabilities: ROIC's short term assets ($62.0M) exceed its short term liabilities ($39.4M).
Long Term Liabilities: ROIC's short term assets ($62.0M) do not cover its long term liabilities ($1.5B).
Debt to Equity History and Analysis
Debt Level: ROIC's net debt to equity ratio (97%) is considered high.
Reducing Debt: ROIC's debt to equity ratio has reduced from 102.8% to 97.4% over the past 5 years.
Debt Coverage: ROIC's debt is not well covered by operating cash flow (10.9%).
Interest Coverage: ROIC's interest payments on its debt are not well covered by EBIT (1.8x coverage).
Balance Sheet
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Dividend
What is Retail Opportunity Investments's current dividend yield, its reliability and sustainability?
Dividend Score
4/6Dividend Score 4/6
Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage
4.26%
Current Dividend Yield
Dividend Yield vs Market
| Retail Opportunity Investments Dividend Yield vs Market |
|---|
| Segment | Dividend Yield |
|---|---|
| Company (Retail Opportunity Investments) | 4.3% |
| Market Bottom 25% (US) | 1.6% |
| Market Top 25% (US) | 4.6% |
| Industry Average (REITs) | 4.0% |
| Analyst forecast in 3 Years (Retail Opportunity Investments) | 4.4% |
Notable Dividend: ROIC's dividend (4.26%) is higher than the bottom 25% of dividend payers in the US market (1.67%).
High Dividend: ROIC's dividend (4.26%) is low compared to the top 25% of dividend payers in the US market (4.69%).
Stability and Growth of Payments
Stable Dividend: ROIC's dividend payments have been volatile in the past 10 years.
Growing Dividend: ROIC's dividend payments have increased over the past 10 years.
Earnings Payout to Shareholders
Earnings Coverage: With its reasonably low payout ratio (48.1%), ROIC's dividend payments are well covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: With its reasonable cash payout ratio (54.3%), ROIC's dividend payments are covered by cash flows.
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Management
How experienced are the management team and are they aligned to shareholders interests?
10.7yrs
Average management tenure
CEO
Stuart Tanz (63 yo)
12.92yrs
Tenure
US$6,306,609
Compensation
Mr. Stuart A. Tanz has been the Chief Executive Officer and President of Retail Opportunity Investments GP LLC - General Partner of Retail Opportunity Investments Partnership, LP since 2009. Mr. Tanz has b...
CEO Compensation Analysis
| Stuart Tanz's Compensation vs Retail Opportunity Investments Earnings |
|---|
| Date | Total Comp. | Salary | Company Earnings |
|---|---|---|---|
| Jun 30 2022 | n/a | n/a | US$52m |
| Mar 31 2022 | n/a | n/a | US$57m |
| Dec 31 2021 | US$6m | US$875k | US$53m |
| Sep 30 2021 | n/a | n/a | US$54m |
| Jun 30 2021 | n/a | n/a | US$39m |
| Mar 31 2021 | n/a | n/a | US$27m |
| Dec 31 2020 | US$6m | US$875k | US$32m |
| Sep 30 2020 | n/a | n/a | US$33m |
| Jun 30 2020 | n/a | n/a | US$44m |
| Mar 31 2020 | n/a | n/a | US$47m |
| Dec 31 2019 | US$6m | US$875k | US$48m |
| Sep 30 2019 | n/a | n/a | US$49m |
| Jun 30 2019 | n/a | n/a | US$45m |
| Mar 31 2019 | n/a | n/a | US$45m |
| Dec 31 2018 | US$5m | US$850k | US$42m |
| Sep 30 2018 | n/a | n/a | US$43m |
| Jun 30 2018 | n/a | n/a | US$38m |
| Mar 31 2018 | n/a | n/a | US$39m |
| Dec 31 2017 | US$5m | US$850k | US$38m |
| Sep 30 2017 | n/a | n/a | US$37m |
| Jun 30 2017 | n/a | n/a | US$35m |
| Mar 31 2017 | n/a | n/a | US$35m |
| Dec 31 2016 | US$5m | US$800k | US$32m |
| Sep 30 2016 | n/a | n/a | US$30m |
| Jun 30 2016 | n/a | n/a | US$30m |
| Mar 31 2016 | n/a | n/a | US$27m |
| Dec 31 2015 | US$4m | US$775k | US$24m |
Compensation vs Market: Stuart's total compensation ($USD6.31M) is about average for companies of similar size in the US market ($USD5.58M).
Compensation vs Earnings: Stuart's compensation has been consistent with company performance over the past year.
Leadership Team
Experienced Management: ROIC's management team is seasoned and experienced (10.7 years average tenure).
Board Members
Experienced Board: ROIC's board of directors are seasoned and experienced ( 11.7 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
| Owner Type | Number of Shares | Ownership Percentage |
|---|---|---|
| Individual Insiders | 3,571,952 | 2.9% |
| Institutions | 121,117,741 | 97.1% |
Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.5%.
Top Shareholders
| Ownership | Name | Shares | Current Value | Change % | Portfolio % | |
|---|---|---|---|---|---|---|
| 22,226,796 | $313.2m | 2.33% | 0.01% | |||
| 19,336,141 | $272.4m | 0.51% | 0.01% | |||
| 7,517,150 | $105.9m | 1.82% | 0.01% | |||
| 3,142,344 | $44.3m | 15.12% | 0.06% | |||
| 3,029,308 | $42.7m | -0.42% | 0.28% | |||
| 2,872,258 | $40.5m | -12.04% | 0.06% | |||
| 2,551,242 | $35.9m | 0.15% | no data | |||
| 2,412,174 | $34.0m | -13.72% | 2.35% | |||
| 2,311,608 | $32.6m | -4.11% | 0.01% | |||
| 2,070,858 | $29.2m | 27.31% | 0.03% | |||
| 2,025,510 | $28.5m | 31.47% | 7.2% | |||
| 1,971,826 | $27.8m | -17.97% | 1.05% | |||
| 1,931,071 | $27.2m | 0% | no data | |||
| 1,839,847 | $25.9m | 19.93% | 0.01% | |||
| 1,816,510 | $25.6m | 0.06% | 0.01% | |||
| 1,757,799 | $24.8m | 1.54% | 0.01% | |||
| 1,756,948 | $24.8m | 21.85% | 0.97% | |||
| 1,677,650 | $23.6m | -1.59% | 0.01% | |||
| 1,656,727 | $23.3m | -6.51% | 0.3% | |||
| 1,595,615 | $22.5m | -1.24% | 0.02% | |||
| 1,340,353 | $18.9m | 0.06% | 0.61% | |||
| 1,277,338 | $18.0m | 2.56% | 0.04% | |||
| 1,184,734 | $16.7m | 0% | no data | |||
| 1,156,246 | $16.3m | 9.5% | no data | |||
| 1,050,201 | $14.8m | -4.3% | 0.99% |
Company Information
Retail Opportunity Investments Corp.'s employee growth, exchange listings and data sources
Key Information
- Name: Retail Opportunity Investments Corp.
- Ticker: ROIC
- Exchange: NasdaqGS
- Founded: NaN
- Industry: Retail REITs
- Sector: Real Estate
- Implied Market Cap: US$1.874b
- Market Cap: US$1.755b
- Shares outstanding: 133.19m
- Website: https://www.roireit.net
Number of Employees
Location
- Retail Opportunity Investments Corp.
- 11250 El Camino Real
- Suite 200
- San Diego
- California
- 92130
- United States
Listings
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| ROIC | NasdaqGS (Nasdaq Global Select) | Yes | Common Stock | US | USD | Oct 2007 |
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/09/28 00:00 |
| End of Day Share Price | 2022/09/28 00:00 |
| Earnings | 2022/06/30 |
| Annual Earnings | 2021/12/31 |
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.