NYSE:ARE

Stock Analysis Report

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Alexandria Real Estate Equities

Executive Summary

Alexandria Real Estate Equities, Inc. (NYSE:ARE), an S&P 500 urban office real estate investment trust ("REIT"), is the first, longest-tenured, and pioneering owner, operator, and developer uniquely focused on collaborative life science, technology, and agtech campuses in AAA innovation cluster locations, with a total market capitalization of $24.3 billion as of March 31, 2020, and an asset base in North America of 41.5 million square feet ("SF").


Snowflake Analysis

Established dividend payer with mediocre balance sheet.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-1.7%

ARE

-2.9%

US REITs

1.3%

US Market


1 Year Return

11.7%

ARE

-12.4%

US REITs

6.1%

US Market

Return vs Industry: ARE exceeded the US REITs industry which returned -12.9% over the past year.

Return vs Market: ARE exceeded the US Market which returned 6.7% over the past year.


Shareholder returns

AREIndustryMarket
7 Day-1.7%-2.9%1.3%
30 Day1.3%-8.1%-0.3%
90 Day2.8%-1.6%16.6%
1 Year14.7%11.7%-8.8%-12.4%8.4%6.1%
3 Year48.9%36.7%12.3%-1.5%35.8%26.9%
5 Year103.9%75.6%37.6%9.4%62.7%44.7%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Alexandria Real Estate Equities undervalued compared to its fair value and its price relative to the market?

76.26x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ARE ($162.25) is trading above our estimate of fair value ($160.59)

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


Price To Earnings Ratio

PE vs Industry: ARE is poor value based on its PE Ratio (76.3x) compared to the REITs industry average (26.9x).

PE vs Market: ARE is poor value based on its PE Ratio (76.3x) compared to the US market (16.2x).


Price to Earnings Growth Ratio

PEG Ratio: ARE is poor value based on its PEG Ratio (7.4x)


Price to Book Ratio

PB vs Industry: ARE is overvalued based on its PB Ratio (2.2x) compared to the US REITs industry average (1.3x).


Next Steps

Future Growth

How is Alexandria Real Estate Equities forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

10.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ARE's forecast earnings growth (10.3% per year) is above the savings rate (2.2%).

Earnings vs Market: ARE's earnings (10.3% per year) are forecast to grow slower than the US market (22.8% per year).

High Growth Earnings: ARE's earnings are forecast to grow, but not significantly.

Revenue vs Market: ARE's revenue (7.7% per year) is forecast to grow slower than the US market (9.3% per year).

High Growth Revenue: ARE's revenue (7.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ARE's Return on Equity is forecast to be low in 3 years time (1.9%).


Next Steps

Past Performance

How has Alexandria Real Estate Equities performed over the past 5 years?

41.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ARE has a large one-off loss of $75.9M impacting its March 31 2020 financial results.

Growing Profit Margin: ARE's current net profit margins (15.1%) are lower than last year (25.9%).


Past Earnings Growth Analysis

Earnings Trend: ARE's earnings have grown significantly by 41.6% per year over the past 5 years.

Accelerating Growth: ARE's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ARE had negative earnings growth (-31.3%) over the past year, making it difficult to compare to the REITs industry average (5.3%).


Return on Equity

High ROE: ARE's Return on Equity (2.7%) is considered low.


Next Steps

Financial Health

How is Alexandria Real Estate Equities's financial position?


Financial Position Analysis

Short Term Liabilities: ARE's short term assets ($1.3B) exceed its short term liabilities ($389.1M).

Long Term Liabilities: ARE's short term assets ($1.3B) do not cover its long term liabilities ($8.4B).


Debt to Equity History and Analysis

Debt Level: ARE's debt to equity ratio (66.9%) is considered high.

Reducing Debt: ARE's debt to equity ratio has reduced from 103% to 66.9% over the past 5 years.

Debt Coverage: ARE's debt is not well covered by operating cash flow (10.1%).

Interest Coverage: ARE's interest payments on its debt are well covered by EBIT (6.4x coverage).


Balance Sheet


Next Steps

Dividend

What is Alexandria Real Estate Equities's current dividend yield, its reliability and sustainability?

2.61%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: ARE's dividend (2.61%) is higher than the bottom 25% of dividend payers in the US market (1.68%).

High Dividend: ARE's dividend (2.61%) is low compared to the top 25% of dividend payers in the US market (4.58%).


Stability and Growth of Payments

Stable Dividend: ARE's dividends per share have been stable in the past 10 years.

Growing Dividend: ARE's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (57.8%), ARE's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ARE's dividends in 3 years are forecast to be thoroughly covered by earnings (0.4% payout ratio).


Next Steps

Management

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

2.3yrs

Average management tenure


CEO

Peter Moglia (53yo)

2.25yrs

Tenure

US$8,268,014

Compensation

Mr. Peter M. Moglia has been the Chief Investment Officer of Alexandria Real Estate Equities, Inc. since January 2009 and has been its Co-Chief Executive Officer since April 23, 2018. Mr. Moglia has been w ...


CEO Compensation Analysis

Compensation vs Market: Peter's total compensation ($USD8.27M) is about average for companies of similar size in the US market ($USD11.49M).

Compensation vs Earnings: Peter's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Joel Marcus
Founder & Executive Chairman13.17yrsUS$11.04m0.29% $61.2m
Peter Moglia
Co-CEO & Co-Chief Investment Officer2.25yrsUS$8.27m0.15% $31.6m
Stephen Richardson
Co-Chief Executive Officer2.25yrsUS$8.31m0.14% $30.5m
Thomas Andrews
Co-President & Regional Market Director of Greater Boston2.25yrsUS$6.31m0.10% $21.9m
Dean Shigenaga
Co-President & CFO2.25yrsUS$7.20m0.11% $22.8m
Jennifer Banks
Co-COO, General Counsel & Corporate Secretary2.25yrsUS$3.89m0.046% $9.8m
Daniel Ryan
Co-Chief Investment Officer & Regional Market Director of San Diegono dataUS$6.97m0.10% $21.6m
James Richardson
Senior Management Consultant & Non-Executive Director21.33yrsUS$312.53k0.033% $7.1m
Lawrence Diamond
Co-COO & Regional Market Director of Maryland2.25yrsno data0.054% $11.6m
Andres Gavinet
Chief Accounting Officer8.08yrsno data0.033% $7.2m

2.3yrs

Average Tenure

56.5yo

Average Age

Experienced Management: ARE's management team is considered experienced (2.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Joel Marcus
Founder & Executive Chairman13.17yrsUS$11.04m0.29% $61.2m
James Richardson
Senior Management Consultant & Non-Executive Director21.33yrsUS$312.53k0.033% $7.1m
Michael Woronoff
Independent Director3yrsUS$258.16k0.0011% $227.4k
Richard Klein
Independent Director16.58yrsUS$275.05k0.0085% $1.8m
John Atkins
Independent Director13.33yrsUS$275.05k0.016% $3.3m
Maria Freire
Independent Director8.25yrsUS$260.05k0.0028% $592.0k
Jennifer Goldstein
Independent Director0.33yrno data0.00076% $163.0k
Steven Hash
Lead Independent Director4.33yrsUS$342.72k0.0095% $2.0m
James Cain
Independent Director4.58yrsUS$248.70k0.0030% $641.3k

8.3yrs

Average Tenure

62yo

Average Age

Experienced Board: ARE's board of directors are considered experienced (8.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: ARE insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 16.4%.


Top Shareholders

Company Information

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


Key Information

  • Name: Alexandria Real Estate Equities, Inc.
  • Ticker: ARE
  • Exchange: NYSE
  • Founded: 1993
  • Industry: Office REITs
  • Sector: Real Estate
  • Market Cap: US$21.449b
  • Shares outstanding: 132.19m
  • Website: https://www.are.com

Number of Employees


Location

  • Alexandria Real Estate Equities, Inc.
  • 26 North Euclid Avenue
  • Pasadena
  • California
  • 91101
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ARENYSE (New York Stock Exchange)YesCommon StockUSUSDMay 1997
A6WDB (Deutsche Boerse AG)YesCommon StockDEEURMay 1997
ARE *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNMay 1997
0HCHLSE (London Stock Exchange)YesCommon StockGBUSDMay 1997
A1RE34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 4 REPR 1 COMBRBRLJan 2020

Biography

Alexandria Real Estate Equities, Inc. (NYSE:ARE), an S&P 500 urban office real estate investment trust ("REIT"), is the first, longest-tenured, and pioneering owner, operator, and developer uniquely focused on collaborative life science, technology, and agtech campuses in AAA innovation cluster locations, with a total market capitalization of $24.3 billion as of March 31, 2020, and an asset base in North America of 41.5 million square feet ("SF"). The asset base in North America includes 28.8 million RSF of operating properties and 2.1 million RSF of Class A properties undergoing construction, 6.5 million RSF of near-term and intermediate-term development and redevelopment projects, and 4.1 million SF of future development projects. Founded in 1994, Alexandria pioneered this niche and has since established a significant market presence in key locations, including Greater Boston, San Francisco, New York City, San Diego, Seattle, Maryland, and Research Triangle. Alexandria has a longstanding and proven track record of developing Class A properties clustered in urban life science, technology, and agtech campuses that provide our innovative tenants with highly dynamic and collaborative environments that enhance their ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity, and success. Alexandria also provides strategic capital to transformative life science, technology, and agtech companies through our venture capital arm. We believe our unique business model and diligent underwriting ensure a high-quality and diverse tenant base that results in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/09 23:53
End of Day Share Price2020/07/09 00:00
Earnings2020/03/31
Annual Earnings2019/12/31


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.