NYSE:APTS

Stock Analysis Report

Preferred Apartment Communities

Executive Summary

Preferred Apartment Communities, Inc. is a Maryland corporation formed primarily to own and operate multifamily properties and, to a lesser extent, own and operate grocery-anchored shopping centers, class A office buildings and student housing properties.

Snowflake

Fundamentals

Second-rate dividend payer and overvalued.


Similar Companies

Share Price & News

How has Preferred Apartment Communities's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

2.0%

APTS

2.4%

US REITs

0.9%

US Market


1 Year Return

-9.9%

APTS

15.7%

US REITs

16.8%

US Market

Return vs Industry: APTS underperformed the US REITs industry which returned 15.7% over the past year.

Return vs Market: APTS underperformed the US Market which returned 16.8% over the past year.


Shareholder returns

APTSIndustryMarket
7 Day2.0%2.4%0.9%
30 Day-6.2%-2.0%4.5%
90 Day0.2%1.7%6.2%
1 Year-3.6%-9.9%20.6%15.7%19.4%16.8%
3 Year20.1%-0.6%40.0%22.5%47.5%38.0%
5 Year116.7%57.0%57.1%24.4%62.0%44.1%

Price Volatility Vs. Market

How volatile is Preferred Apartment Communities's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Preferred Apartment Communities undervalued compared to its fair value and its price relative to the market?

0.33x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: APTS ($13.61) is trading above our estimate of fair value ($12.3)

Significantly Below Fair Value: APTS is trading above our estimate of fair value.


Price To Earnings Ratio

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

PE vs Market: APTS 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 APTS's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: APTS is good value based on its PB Ratio (0.3x) compared to the US REITs industry average (2x).


Next Steps

Future Growth

How is Preferred Apartment Communities forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

-13.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

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

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

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

Revenue vs Market: APTS's revenue (14.7% per year) is forecast to grow faster than the US market (7.3% per year).

High Growth Revenue: APTS's revenue (14.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

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


Next Steps

Past Performance

How has Preferred Apartment Communities performed over the past 5 years?

-36.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: APTS has large one-off items impacting its financial results.

Growing Profit Margin: APTS is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: APTS is unprofitable, and losses have increased over the past 5 years at a rate of -36.3% per year.

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

Earnings vs Industry: APTS is unprofitable, making it difficult to compare its past year earnings growth to the REITs industry (8.7%).


Return on Equity

High ROE: APTS has a negative Return on Equity (1.13%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Preferred Apartment Communities'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: APTS has a high level of physical assets or inventory.

Debt Coverage by Assets: APTS's debt is not covered by short term assets (assets are 0.1x 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 APTS has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: APTS is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 34.8% per year.


Financial Institutions Analysis

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

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

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

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

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

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


Next Steps

Dividend

What is Preferred Apartment Communities's current dividend yield, its reliability and sustainability?

7.71%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Preferred Apartment Communities before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company7.7%marketbottom25%1.4%markettop25%3.7%industryaverage3.7%forecastin3Years7.8%

Current dividend yield vs market & industry

Notable Dividend: APTS's dividend (7.71%) is higher than the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: APTS's dividend (7.71%) is in the top 25% of dividend payers in the US market (3.68%)


Stability and Growth of Payments

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

Growing Dividend: APTS's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (233.5%), APTS's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: APTS's dividends in 3 years are forecast to be thoroughly covered by earnings (1.2% payout ratio).


Next Steps

Management

What is the CEO of Preferred Apartment Communities's salary, the management and board of directors tenure and is there insider trading?

3.2yrs

Average management tenure


CEO

Dan DuPree (72yo)

1.6yrs

Tenure

US$1,732,607

Compensation

Mr. Daniel M. DuPree, also known as Dan, has been Chairman and Chief Executive Officer of Preferred Apartment Communities, Inc. since April 16, 2018. Mr. DuPree served as the Vice Chairman of Preferred Apa ...


CEO Compensation Analysis

Compensation vs Market: Dan's total compensation ($USD1.73M) is below average for companies of similar size in the US market ($USD2.63M).

Compensation vs Earnings: Dan's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

3.2yrs

Average Tenure

60yo

Average Age

Experienced Management: APTS's management team is considered experienced (3.2 years average tenure).


Board Age and Tenure

4.7yrs

Average Tenure

62.5yo

Average Age

Experienced Board: APTS's board of directors are considered experienced (4.7 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyUS$6,04415 Nov 19
Steve Bartkowski
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares460
Max PriceUS$13.14
BuyUS$130,70013 Nov 19
Daniel DuPree
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares10,000
Max PriceUS$13.07
SellUS$80,96505 Sep 19
Gary Coursey
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,698
Max PriceUS$14.31
SellUS$26,83811 Dec 18
William Gresham
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,800
Max PriceUS$14.91

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 10.5%.


Management Team

  • Dan DuPree (72yo)

    Chairman & CEO

    • Tenure: 1.6yrs
    • Compensation: US$1.73m
  • Joel Murphy (60yo)

    Director

    • Tenure: 0.5yrs
    • Compensation: US$1.41m
  • Paul Cullen

    Executive VP & Chief Marketing Officer

    • Tenure: 3.2yrs
  • Mike Cronin (64yo)

    Executive VP

    • Tenure: 10.2yrs
    • Compensation: US$687.80k
  • Lenny Silverstein (60yo)

    Co-Founder

    • Tenure: 1.6yrs
    • Compensation: US$1.73m
  • Jeffrey Sprain (47yo)

    Executive VP

    • Tenure: 10.8yrs
    • Compensation: US$497.10k
  • John Isakson (48yo)

    CFO & Executive VP

    • Tenure: 1.3yrs
    • Compensation: US$651.76k
  • Jeff Sherman

    Executive VP & MD of Multifamily

    • Tenure: 0yrs
  • Rob Gayle

    Chief Operating Officer of Preferred Residential Management LLC

    • Tenure: 1.3yrs
  • Kimberly Hodge

    Executive VP & Chief Property Management Officer

    • Tenure: 1.8yrs

Board Members

  • Howard McLure (62yo)

    Lead Independent Director

    • Tenure: 5.8yrs
    • Compensation: US$102.80k
  • Sara Finley (58yo)

    Independent Director

    • Tenure: 0.5yrs
  • Dan DuPree (72yo)

    Chairman & CEO

    • Tenure: 1.6yrs
    • Compensation: US$1.73m
  • Joel Murphy (60yo)

    Director

    • Tenure: 0.5yrs
    • Compensation: US$1.41m
  • Tim Peterson (54yo)

    Independent Director

    • Tenure: 8.7yrs
    • Compensation: US$103.00k
  • Johnny Gresham (76yo)

    Independent Director

    • Tenure: 5.8yrs
    • Compensation: US$80.00k
  • Gary Coursey (79yo)

    Independent Director

    • Tenure: 8.9yrs
    • Compensation: US$90.00k
  • Steve Bartkowski (66yo)

    Independent Director

    • Tenure: 8.7yrs
    • Compensation: US$99.80k
  • Lenny Silverstein (60yo)

    Co-Founder

    • Tenure: 1.6yrs
    • Compensation: US$1.73m
  • John Wiens (63yo)

    Independent Director

    • Tenure: 3.5yrs
    • Compensation: US$80.00k

Company Information

Preferred Apartment Communities, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Preferred Apartment Communities, Inc.
  • Ticker: APTS
  • Exchange: NYSE
  • Founded: 2009
  • Industry: Residential REITs
  • Sector: Real Estate
  • Implied Market Cap: US$635.358m
  • Market Cap: US$623.236m
  • Shares outstanding: 46.65m
  • Website: https://pacapts.com

Location

  • Preferred Apartment Communities, Inc.
  • 3284 Northside Parkway NW
  • Suite 150
  • Atlanta
  • Georgia
  • 30327
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
APTSNYSE (New York Stock Exchange)YesCommon StockUSUSDApr 2011
P2ADB (Deutsche Boerse AG)YesCommon StockDEEURApr 2011

Biography

Preferred Apartment Communities, Inc. is a Maryland corporation formed primarily to own and operate multifamily properties and, to a lesser extent, own and operate grocery-anchored shopping centers, class  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/21 00:26
End of Day Share Price2019/11/20 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.