NYSE:GRP.U

Stock Analysis Report

Granite Real Estate Investment Trust

Executive Summary

Granite is a Canadian-based REIT engaged in the acquisition, development, ownership and management of industrial, warehouse and logistics properties in North America and Europe.

Rewards

Trading at 33.6% below its fair value

Revenue is forecast to grow 9.36% per year

Risk Analysis

Unstable dividend track record

Large one-off items impacting financial results

Profit margins are lower than last year

Shareholders have been diluted in the past year



Snowflake Analysis

Undervalued established dividend payer.


Similar Companies

Share Price & News

How has Granite Real Estate Investment Trust's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

0.7%

GRP.U

0.4%

US REITs

0.3%

US Market


1 Year Return

29.4%

GRP.U

12.5%

US REITs

18.5%

US Market

Return vs Industry: GRP.U exceeded the US REITs industry which returned 12.5% over the past year.

Return vs Market: GRP.U exceeded the US Market which returned 18.5% over the past year.


Shareholder returns

GRP.UIndustryMarket
7 Day0.7%0.4%0.3%
30 Day3.9%1.5%1.5%
90 Day7.8%0.4%5.7%
1 Year36.1%29.4%17.3%12.5%21.1%18.5%
3 Year78.5%52.6%34.9%18.1%45.9%36.4%
5 Year98.7%51.4%56.8%24.4%71.4%52.5%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

Is Granite Real Estate Investment Trust undervalued compared to its fair value and its price relative to the market?

33.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: GRP.U ($51.73) is trading below our estimate of fair value ($77.94)

Significantly Below Fair Value: GRP.U is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: GRP.U is good value based on its PE Ratio (9x) compared to the REITs industry average (38.8x).

PE vs Market: GRP.U is good value based on its PE Ratio (9x) compared to the US market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate GRP.U's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: GRP.U is good value based on its PB Ratio (1.2x) compared to the US REITs industry average (2x).


Next Steps

Future Growth

How is Granite Real Estate Investment Trust forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

9.4%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if GRP.U's forecast earnings growth is above the savings rate (1.7%).

Earnings vs Market: Insufficient data to determine if GRP.U's earnings are forecast to grow faster than the US market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: GRP.U's revenue (9.4% per year) is forecast to grow faster than the US market (7.4% per year).

High Growth Revenue: GRP.U's revenue (9.4% 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 GRP.U's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Granite Real Estate Investment Trust performed over the past 5 years?

31.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GRP.U has a large one-off gain of CA$255.8M impacting its September 30 2019 financial results.

Growing Profit Margin: GRP.U's current net profit margins are lower than last year .


Past Earnings Growth Analysis

Earnings Trend: GRP.U's earnings have grown significantly by 31.4% per year over the past 5 years.

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

Earnings vs Industry: GRP.U had negative earnings growth (-38.4%) over the past year, making it difficult to compare to the REITs industry average (8.3%).


Return on Equity

High ROE: GRP.U's Return on Equity (13.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Granite Real Estate Investment Trust'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: GRP.U has a high level of physical assets or inventory.

Debt Coverage by Assets: GRP.U's debt is not covered by short term assets (assets are 0.4x debt).


Financial Institutions Analysis

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

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

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

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

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

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


Next Steps

Dividend

What is Granite Real Estate Investment Trust's current dividend yield, its reliability and sustainability?

4.07%

Current Dividend Yield


Dividend Yield vs Market

company4.1%marketbottom25%1.4%markettop25%3.7%industryaverage3.7%forecastin3Years4.2%

Current dividend yield vs market & industry

Notable Dividend: GRP.U's dividend (4.07%) is higher than the bottom 25% of dividend payers in the US market (1.42%).

High Dividend: GRP.U's dividend (4.07%) is in the top 25% of dividend payers in the US market (3.7%)


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (77%), GRP.U's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: GRP.U's dividends in 3 years are forecast to be thoroughly covered by earnings (1.3% payout ratio).


Next Steps

Management

What is the CEO of Granite Real Estate Investment Trust's salary, the management and board of directors tenure and is there insider trading?

0.9yrs

Average management tenure


CEO

Kevan Gorrie (50yo)

1.3yrs

Tenure

CA$4,295,832

Compensation

Mr. Kevan S. Gorrie, P. Eng, ICD.D, has been President, Chief Executive Officer and Trustee/Director at Granite REIT and and Granite REIT Inc. since August 01, 2018. He was the President of Pure Industrial ...


CEO Compensation Analysis

Compensation vs Market: Kevan's total compensation ($USD3.25M) is below average for companies of similar size in the US market ($USD5.10M).

Compensation vs Earnings: Insufficient data to compare Kevan's compensation with company performance.


Management Age and Tenure

0.9yrs

Average Tenure

Experienced Management: GRP.U's management team is not considered experienced ( 0.9 years average tenure), which suggests a new team.


Board Age and Tenure

2.5yrs

Average Tenure

53.5yo

Average Age

Experienced Board: GRP.U's board of directors are not considered experienced ( 2.5 years average tenure), which suggests a new board.


Insider Trading

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


Recent Insider Transactions

BuyCA$7,75111 Nov 19
Kevan Gorrie
EntityIndividual
Role
Chief Executive Officer
President
Shares155
Max PriceCA$50.00
BuyCA$22,88823 Sep 19
Kevan Gorrie
EntityIndividual
Role
Chief Executive Officer
President
Shares475
Max PriceCA$48.18
BuyCA$11,54406 Aug 19
Kevan Gorrie
EntityIndividual
Role
Chief Executive Officer
President
Shares250
Max PriceCA$46.21
BuyCA$18,29318 Jun 19
Kevan Gorrie
EntityIndividual
Role
Chief Executive Officer
President
Shares400
Max PriceCA$45.75
BuyCA$90,37810 May 19
Kevan Gorrie
EntityIndividual
Role
Chief Executive Officer
President
Shares2,000
Max PriceCA$45.19
SellCA$1,373,77828 Mar 19
Sandpiper Asset Management, Inc
EntityCompany
Shares28,752
Max PriceCA$47.78
SellCA$10,844,24727 Mar 19
Sandpiper Asset Management, Inc
EntityCompany
Shares226,473
Max PriceCA$48.19
BuyCA$47,51122 Mar 19
Kevan Gorrie
EntityIndividual
Role
Chief Executive Officer
President
Shares1,000
Max PriceCA$47.51
BuyCA$469,44315 Mar 19
Remco Daal
EntityIndividual
Role
Member of the Board of Directors
Independent Trustee
Shares10,000
Max PriceCA$46.95
BuyCA$74,57913 Dec 18
Lorne Kumer
EntityIndividual
Shares1,850
Max PriceCA$40.33
BuyCA$52,96611 Dec 18
Kevan Gorrie
EntityIndividual
Role
Chief Executive Officer
President
Shares1,300
Max PriceCA$40.74

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 8.1%.


Management Team

  • Greg Avioli

    CEO of the Racing & Gaming Division and President of the Racing & Gaming Division

    • Tenure: 8.8yrs
  • Witsard Schaper

    Head of Europe

    • Tenure: 0.9yrs
  • George Haines

    Interim President of Santa Anita Park & Golden Gate Fields

    • Tenure: 9.6yrs
  • Teresa Neto (53yo)

    Chief Financial Officer

    • Tenure: 0.4yrs
  • Sonia Gismondi

    Senior Vice President of Accounting & Financial Reporting

    • Tenure: 0.9yrs
  • Kevan Gorrie (50yo)

    President

    • Tenure: 1.3yrs
    • Compensation: CA$4.30m
  • Michael Ramparas

    Senior VP of Global Real Estate & Head of Investments

    • Tenure: 0.9yrs
  • Lawrence Clarfield

    Senior VP & Legal Counsel

    • Tenure: 0.9yrs
  • Andrea Sanelli

    Manager of Legal & Investor Services

    • Tenure: 0yrs
  • Jon Sorg

    Head of U.S.

    • Tenure: 0.2yrs

Board Members

  • Al Mawani (67yo)

    Independent Trustee

    • Tenure: 2.5yrs
    • Compensation: CA$144.00k
  • Kelly Marshall (53yo)

    Independent Chairman

    • Tenure: 2.5yrs
    • Compensation: CA$143.00k
  • Gerry Miller (64yo)

    Independent Trustee

    • Tenure: 8.5yrs
    • Compensation: CA$137.00k
  • Sheila Murray

    Independent Director

    • Tenure: 0.5yrs
  • Remco Daal (53yo)

    Independent Trustee

    • Tenure: 2.5yrs
    • Compensation: CA$123.00k
  • Kevan Gorrie (50yo)

    President

    • Tenure: 1.3yrs
    • Compensation: CA$4.30m
  • Peter Aghar (51yo)

    Independent Trustee

    • Tenure: 2.5yrs
    • Compensation: CA$110.00k
  • Jennifer Warren (54yo)

    Independent Trustee

    • Tenure: 1.5yrs
    • Compensation: CA$45.00k
  • Fern Grodner (65yo)

    Independent Director

    • Tenure: 0.5yrs

Company Information

Granite Real Estate Investment Trust's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Granite Real Estate Investment Trust
  • Ticker: GRP.U
  • Exchange: NYSE
  • Founded: 1998
  • Industry: Industrial REITs
  • Sector: Real Estate
  • Market Cap: CA$3.699b
  • Listing Market Cap: CA$2.798b
  • Shares outstanding: 54.05m
  • Website: https://www.granitereit.com

Number of Employees


Location

  • Granite Real Estate Investment Trust
  • Toronto-Dominion Centre
  • Suite 4010
  • Toronto
  • Ontario
  • M5K 1H1
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
GRT.UNTSX (The Toronto Stock Exchange)YesStapled UnitsCACADAug 2003
GRP.UNYSE (New York Stock Exchange)YesStapled UnitsUSUSDAug 2003

Biography

Granite is a Canadian-based REIT engaged in the acquisition, development, ownership and management of industrial, warehouse and logistics properties in North America and Europe. Granite owns over 85 invest ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/09 00:16
End of Day Share Price2019/12/06 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.