InfraREIT is engaged in owning and leasing rate-regulated electric transmission assets in the state of Texas and is structured as a real estate investment trust.
The last earnings update was 14 days ago.
Discounted Cash Flow Calculation for NYSE:HIFR using 2 Stage Free Cash Flow to Equity using Funds From Operations Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
InfraREIT (REIT) is a Real Estate Investment Trust (REIT), we use funds from operations (FFO) or adjusted funds from operations (AFFO) instead of levered free cash flow for REITs. This excludes depreciation and borrowing. Ideally analysts estimates of AFFO are used, where these aren't available we use FFO.
NYSE:HIFR DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
InfraREIT (REIT)'s share price is below the future cash flow value, and at a moderate discount (> 20%).
InfraREIT (REIT)'s share price is below the future cash flow value, and at a substantial discount (> 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
InfraREIT (REIT)'s earnings available for a low price, and how does
this compare to other companies in the same industry?
InfraREIT (REIT)'s earnings are expected to decrease over the next 1-3 years, this is not considered high growth.
InfraREIT (REIT)'s revenue is expected to grow by 6.1% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
InfraREIT (REIT)'s performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
5/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
InfraREIT (REIT)'s finances.
The net worth of a company is the difference between its assets and liabilities.
InfraREIT (REIT)'s short term (1 year) commitments are greater than its holdings of cash and other short term assets.
InfraREIT (REIT)'s long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
InfraREIT (REIT)'s finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
High level of physical assets or inventory.
Debt is not covered by short term assets, assets are 0.1x debt.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. David A. Campbell has been President & Chief Executive Officer of InfraREIT Inc. (REIT) since August 2014 and its Board Member since September 2014. Mr. Campbell serves as President and Chief Executive Officer of Hunt Utility Services, LLC and Sharyland Utilites, L.P. He was President and Chief Operating Officer of Bluescape Resources, an independent resource and investment company based in Dallas, Texas. From mid-2008 through 2012, Mr. Campbell served as Chief Executive Officer of Luminant, a competitive power generation subsidiary of Energy Future Holdings (“EFH”) (previously TXU Corp.). Mr. Campbell originally joined TXU Corp. in 2004 as Executive Vice President of Corporate Planning, Strategy and Risk and became Chief Financial Officer of TXU Corp. in early 2006. Before TXU Corp., Mr. Campbell was a Principal in the Dallas office of McKinsey & Company, where he led the Texas and Southern Region hubs of McKinsey’s corporate finance and strategy practice. From 2010 to 2012, Mr. Campbell served as a Board Member for the National Nuclear Accrediting Board and the Electric Power Research Institute. He has been President & Chief Executive Officer of InfraREIT Inc. since August 2014 and its Board Member since September 2014. Mr. Campbell earned a Bachelor of Arts from Yale University and a Juris Doctorate from Harvard Law School. Also, he graduated with a Master’s degree from Oxford University, where he studied as a Rhodes Scholar.
Insufficient data for David to compare compensation growth.
Insufficient data for David to establish whether their remuneration is reasonable compared to companies of similar size in United States of America.
Management Team Tenure
Average tenure and age of the
management team in years:
The tenure for the InfraREIT (REIT) management team is about average.
Senior VP & CFO
Senior VP & General Counsel
VP, General Tax Counsel & Corporate Secretary
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the InfraREIT (REIT) board of directors is about average.
InfraREIT is engaged in owning and leasing rate-regulated electric transmission assets in the state of Texas and is structured as a real estate investment trust. The Company is externally managed by Hunt Utility Services, LLC, an affiliate of Hunt Consolidated, Inc. (a diversified holding company based in Dallas, Texas, and managed by the Ray L. Hunt family). The Company's shares are traded on the New York Stock Exchange under the symbol "HIFR."
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