NYSE:DRE

Stock Analysis Report

Executive Summary

Duke Realty Corporation owns and operates approximately 155 million rentable square feet of industrial assets in 20 major logistics markets.

Rewards

Trading at 23.8% below its fair value

Earnings have grown 15.4% per year over the past 5 years

Risk Analysis

Earnings are forecast to decline by an average of -14% per year for the next 3 years

Unstable dividend track record

Large one-off items impacting financial results



Snowflake Analysis

Second-rate dividend payer and slightly overvalued.


Similar Companies

Share Price & News

How has Duke Realty's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

1.3%

DRE

2.3%

US REITs

0.8%

US Market


1 Year Return

25.4%

DRE

20.0%

US REITs

25.1%

US Market

Return vs Industry: DRE exceeded the US REITs industry which returned 17.9% over the past year.

Return vs Market: DRE matched the US Market which returned 25.1% over the past year.


Shareholder returns

DREIndustryMarket
7 Day1.3%2.3%0.8%
30 Day4.7%4.3%3.1%
90 Day3.3%0.3%10.9%
1 Year28.9%25.4%24.9%20.0%27.7%25.1%
3 Year53.1%36.4%36.0%18.9%51.3%41.6%
5 Year93.4%59.7%47.5%17.1%77.2%57.6%

Price Volatility Vs. Market

How volatile is Duke Realty's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Duke Realty undervalued compared to its fair value and its price relative to the market?

14.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: DRE ($34.99) is trading below our estimate of fair value ($45.91)

Significantly Below Fair Value: DRE is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: DRE is good value based on its PE Ratio (31.2x) compared to the REITs industry average (37.8x).

PE vs Market: DRE is poor value based on its PE Ratio (31.2x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: DRE's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: DRE is overvalued based on its PB Ratio (2.6x) compared to the US REITs industry average (2x).


Next Steps

Future Growth

How is Duke Realty forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

-14.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DRE's earnings are forecast to decline over the next 3 years (-14% per year).

Earnings vs Market: DRE's earnings are forecast to decline over the next 3 years (-14% per year).

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

Revenue vs Market: DRE's revenue (6.4% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: DRE's revenue (7.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: DRE's Return on Equity is forecast to be low in 3 years time (3.7%).


Next Steps

Past Performance

How has Duke Realty performed over the past 5 years?

15.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DRE has a large one-off gain of $236.6M impacting its September 30 2019 financial results.

Growing Profit Margin: DRE's current net profit margins (39.5%) are lower than last year (43.9%).


Past Earnings Growth Analysis

Earnings Trend: DRE's earnings have grown by 15.4% per year over the past 5 years.

Accelerating Growth: DRE's earnings growth over the past year (7.9%) is below its 5-year average (15.4% per year).

Earnings vs Industry: DRE earnings growth over the past year (7.9%) underperformed the REITs industry 8.1%.


Return on Equity

High ROE: DRE's Return on Equity (8.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Duke Realty'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: DRE has a high level of physical assets or inventory.

Debt Coverage by Assets: DRE's debt is not covered by short term assets (assets are 0.3x debt).


Financial Institutions Analysis

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

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

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

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

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

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


Next Steps

Dividend

What is Duke Realty's current dividend yield, its reliability and sustainability?

2.64%

Current Dividend Yield


Dividend Yield vs Market

company2.6%marketbottom25%1.4%markettop25%3.7%industryaverage3.6%forecastin3Years2.7%

Current dividend yield vs market & industry

Notable Dividend: DRE's dividend (2.69%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: DRE's dividend (2.69%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: DRE's dividend payments have been volatile in the past 10 years.

Growing Dividend: DRE's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (60.4%), DRE's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: DRE's dividends in 3 years are forecast to be thoroughly covered by earnings (0.1% payout ratio).


Next Steps

Management

What is the CEO of Duke Realty's salary, the management and board of directors tenure and is there insider trading?

2.5yrs

Average management tenure


CEO

Jim Connor (60yo)

4yrs

Tenure

US$6,873,613

Compensation

Mr. James B. Connor, known as Jim, has been the Chief Executive Officer of Duke Realty Corporation, the General Partner of Duke Realty L.P. since January 1, 2016 and has been its Chairman of the Board sinc ...


CEO Compensation Analysis

Compensation vs Market: Jim's total compensation ($USD6.87M) is below average for companies of similar size in the US market ($USD10.76M).

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


Management Age and Tenure

2.5yrs

Average Tenure

54yo

Average Age

Experienced Management: DRE's management team is considered experienced (2.5 years average tenure).


Board Age and Tenure

6.8yrs

Average Tenure

68.5yo

Average Age

Experienced Board: DRE's board of directors are considered experienced (6.8 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellUS$1,003,28820 Nov 19
James Connor
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares28,600
Max PriceUS$35.08
SellUS$342,89022 Aug 19
Peter Harrington
EntityIndividual
Shares10,297
Max PriceUS$33.30
SellUS$254,55407 Aug 19
Nicholas Anthony
EntityIndividual
Role
Chief Investment Officer
Executive VP & Chief Investment Officer
Shares7,806
Max PriceUS$32.61
SellUS$154,45015 Mar 19
Melanie Sabelhaus
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,000
Max PriceUS$30.89
SellUS$545,80311 Mar 19
Ann Dee
EntityIndividual
Role
Chief Legal Officer
Executive VP
Shares18,334
Max PriceUS$29.77
SellUS$298,20007 Mar 19
Steven Schnur
EntityIndividual
Role
Chief Operating Officer
Executive VP & COO
Shares10,000
Max PriceUS$29.82
SellUS$151,69221 Feb 19
Charles Eitel
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,075
Max PriceUS$29.89
SellUS$288,86905 Feb 19
Nicholas Anthony
EntityIndividual
Role
Chief Investment Officer
Executive VP & Chief Investment Officer
Shares9,937
Max PriceUS$29.07
SellUS$1,366,21305 Feb 19
Mark Denien
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares46,328
Max PriceUS$29.49

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Jim Connor (60yo)

    Chairman & CEO

    • Tenure: 4yrs
    • Compensation: US$6.87m
  • Paul Defonce

    Senior Vice President of Information Technology

    • Ron Hubbard

      Vice President of Investor relations

      • Mark Denien (51yo)

        Executive VP & CFO

        • Tenure: 6.7yrs
        • Compensation: US$3.00m
      • Ann Dee (59yo)

        Executive VP

        • Tenure: 7yrs
        • Compensation: US$2.15m
      • Nick Anthony (54yo)

        Executive VP & Chief Investment Officer

        • Compensation: US$2.41m
      • Helen McCarthy

        Manager of Communications & Public Relations

        • Steve Schnur (46yo)

          Executive VP & COO

          • Tenure: 0.3yrs
          • Compensation: US$2.20m
        • Mark Milnamow

          Senior VP & Chief Accounting Officer

          • Tenure: 0.9yrs
        • Jenny Bean

          Senior Vice President of Human Resources

          • Tenure: 1yrs

        Board Members

        • Ngaire Cuneo (68yo)

          Independent Director

          • Tenure: 25yrs
          • Compensation: US$228.75k
        • Peter Scott (69yo)

          Independent Director

          • Tenure: 8.3yrs
          • Compensation: US$250.00k
        • Mike Szymanczyk (70yo)

          Independent Director

          • Tenure: 5.8yrs
          • Compensation: US$245.00k
        • Lynn Thurber (72yo)

          Independent Director

          • Tenure: 11.5yrs
          • Compensation: US$226.00k
        • Charlie Eitel (69yo)

          Independent Director

          • Tenure: 21yrs
          • Compensation: US$226.00k
        • Dave Stockert (56yo)

          Lead Director

          • Tenure: 1yrs
          • Compensation: US$226.00k
        • Jim Connor (60yo)

          Chairman & CEO

          • Tenure: 4yrs
          • Compensation: US$6.87m
        • Melanie Sabelhaus (70yo)

          Independent Director

          • Tenure: 7.8yrs
          • Compensation: US$233.50k
        • John Case (55yo)

          Independent Director

          • Tenure: 2yrs
          • Compensation: US$250.00k
        • Norman Jenkins (56yo)

          Independent Director

          • Tenure: 2.5yrs
          • Compensation: US$225.00k

        Company Information

        Duke Realty Corporation's company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: Duke Realty Corporation
        • Ticker: DRE
        • Exchange: NYSE
        • Founded: 1972
        • Industry: Industrial REITs
        • Sector: Real Estate
        • Implied Market Cap: US$13.323b
        • Market Cap: US$13.089b
        • Shares outstanding: 370.71m
        • Website: https://www.dukerealty.com

        Number of Employees


        Location

        • Duke Realty Corporation
        • 600 East 96th Street
        • Suite 100
        • Indianapolis
        • Indiana
        • 46240
        • United States

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        DRENYSE (New York Stock Exchange)YesCommon SharesUSUSDAug 1988
        DURDB (Deutsche Boerse AG)YesCommon SharesDEEURAug 1988
        0ID0LSE (London Stock Exchange)YesCommon SharesGBUSDAug 1988
        DRE *BMV (Bolsa Mexicana de Valores)YesCommon SharesMXMXNAug 1988

        Biography

        Duke Realty Corporation owns and operates approximately 155 million rentable square feet of industrial assets in 20 major logistics markets. Duke Realty Corporation is publicly traded on the NYSE under the symbol DRE and is listed on the S&P 500 Index. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/22 23:36
        End of Day Share Price2020/01/22 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.