Retail Opportunity Investments (NasdaqGS:ROIC) - Share price, News & Analysis

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

ROIC ($17.37) is trading below our estimate of [[fair value]] ($27.16)

ROIC fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	0/6
Past Performance	3/6
Financial Health	2/6
Dividends	4/6

ROIC Stock Overview

Rewards

Trading at 36.1% below our estimate of its fair value

Earnings have grown 5.2% per year over the past 5 years

Risk Analysis

Earnings are forecast to decline by an average of 4.7% per year for the next 3 years

Interest payments are not well covered by earnings

Unstable dividend track record

Large one-off items impacting financial results

+ 1 more risk

Retail Opportunity Investments Competitors

Macerich

NYSE:MAC

US$2.4b

Urban Edge Properties

NYSE:UE

US$2.0b

InvenTrust Properties

NYSE:IVT

US$1.9b

SITE Centers

NYSE:SITC

US$3.1b

Price History & Performance

Summary of all time highs, changes and price drops for Retail Opportunity Investments
Historical stock prices
Current Share Price	US$17.37
52 Week High	US$20.09
52 Week Low	US$15.07
Beta	1.38
1 Month Change	10.43%
3 Month Change	3.15%
1 Year Change	-1.59%
3 Year Change	-4.09%
5 Year Change	-13.37%
Change since IPO	90.25%

Shareholder Returns

	ROIC	US REITs	US Market
7D	2.1%	1.8%	0.3%
1Y	-1.6%	-5.0%	-13.5%

Return vs Industry: ROIC exceeded the US REITs industry which returned -6.7% over the past year.

Return vs Market: ROIC exceeded the US Market which returned -13% over the past year.

Price Volatility

Is ROIC's price volatile compared to industry and market?
ROIC volatility
ROIC Average Weekly Movement	4.3%
REITs Industry Average Movement	4.3%
Market Average Movement	7.9%
10% most volatile stocks in US Market	17.2%
10% least volatile stocks in US Market	3.2%

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

How do Retail Opportunity Investments's earnings and revenue compare to its market cap?
ROIC fundamental statistics
Market Cap	US$2.31b
Earnings (TTM)	US$52.38m
Revenue (TTM)	US$298.88m

41.3x

P/E Ratio

7.2x

P/S Ratio

Is ROIC overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
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

n/a

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 comparison

Dividends

3.5%

Current Dividend Yield

48%

Payout Ratio

Does ROIC pay a reliable dividends?

See ROIC dividend history and benchmarks

When do you need to buy ROIC by to receive an upcoming dividend?
Retail Opportunity Investments dividend dates
Ex Dividend Date	Sep 15 2022
Dividend Pay Date	Oct 07 2022
Days until Ex dividend	35 days
Days until Dividend pay date	57 days

Does ROIC pay a reliable dividends?

See ROIC dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is ROIC 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
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.

The above table shows the n/a ratio for ROIC. This is calculated by dividing ROIC's market cap by their current preferred multiple.
What is ROIC's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$2.31b

ROIC 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	12.1x
Enterprise Value/EBITDA	19.6x
PEG Ratio	-8.8x

Price to Earnings Ratio vs Peers

How does ROIC's PE Ratio compare to its peers?

ROIC PE Ratio vs Peers

The above table shows the PE ratio for ROIC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	36.7x
MAC Macerich	62.8x	-3.5%	US$2.4b
UE Urban Edge Properties	20.6x	-2.0%	US$2.0b
IVT InvenTrust Properties	42.9x	-105.4%	US$1.9b
SITC SITE Centers	20.4x	-21.1%	US$3.1b
ROIC Retail Opportunity Investments	41.3x	-4.7%	US$2.3b

Price-To-Earnings vs Peers: ROIC is expensive based on its Price-To-Earnings Ratio (41.3x) compared to the peer average (36.7x).

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 (41.3x) compared to the US REITs industry average (31.3x)

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.

ROIC PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	41.3x
Fair PE Ratio	28.6x

Price-To-Earnings vs Fair Ratio: ROIC is expensive based on its Price-To-Earnings Ratio (41.3x) compared to the estimated Fair Price-To-Earnings Ratio (28.6x).

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 ($17.37) is trading below our estimate of fair value ($27.16)

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 less than 20% higher than the current share price.

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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 3 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-4.7%

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 (-4.7% per year).

Earnings vs Market: ROIC's earnings are forecast to decline over the next 3 years (-4.7% per year).

High Growth Earnings: ROIC's earnings are forecast to decline over the next 3 years.

Revenue vs Market: ROIC's revenue (3.6% per year) is forecast to grow slower than the US market (7.9% per year).

High Growth Revenue: ROIC's revenue (3.6% 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 (4.7%).

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Past Performance

How has Retail Opportunity Investments 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

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 47.6%.

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

2/6

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: 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

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

3.45%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: ROIC's dividend (3.45%) is higher than the bottom 25% of dividend payers in the US market (1.52%).

High Dividend: ROIC's dividend (3.45%) is low compared to the top 25% of dividend payers in the US market (4.08%).

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?

10.6yrs

Average management tenure

CEO

Stuart Tanz (63 yo)

12.83yrs

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

Compensation vs Market: Stuart's total compensation ($USD6.31M) is about average for companies of similar size in the US market ($USD5.45M).

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 (10.6 years average tenure).

Board Members

Experienced Board: ROIC's board of directors are seasoned and experienced ( 11.6 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 been diluted in the past year, with total shares outstanding growing by 2.5%.

Data	Last Updated (UTC time)
Company Analysis	2022/08/09 00:00
End of Day Share Price	2022/08/09 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31