NYSE:IRET

Stock Analysis Report

Investors Real Estate Trust

Executive Summary

IRET is a real estate company focused on the ownership, management, acquisition, redevelopment, and development of apartment communities.

Rewards

Trading at 26.1% below its fair value

Became profitable this year

Risk Analysis

Earnings are forecast to decline by an average of -169.8% per year for the next 3 years

Unstable dividend track record

Large one-off items impacting financial results



Snowflake Analysis

Good value average dividend payer.


Similar Companies

Bluerock Residential Growth REIT

AMEX:BRG

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

1.5%

IRET

0.9%

US REITs

0.6%

US Market


1 Year Return

28.2%

IRET

18.9%

US REITs

24.6%

US Market

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

Return vs Market: IRET exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

IRETIndustryMarket
7 Day1.5%0.9%0.6%
30 Day1.8%3.9%3.0%
90 Day-5.8%0.1%10.6%
1 Year33.8%28.2%23.8%18.9%27.3%24.6%
3 Year23.6%7.1%35.5%18.4%50.5%40.8%
5 Year17.9%-12.5%46.8%16.5%78.9%59.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

24.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: IRET ($71.7) is trading below our estimate of fair value ($97.01)

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


Price To Earnings Ratio

PE vs Industry: IRET is good value based on its PE Ratio (20.4x) compared to the REITs industry average (37.8x).

PE vs Market: IRET is poor value based on its PE Ratio (20.4x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: IRET is good value based on its PB Ratio (1.9x) compared to the US REITs industry average (2x).


Next Steps

Future Growth

How is Investors Real Estate Trust forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

-169.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: IRET's earnings are forecast to decline over the next 3 years (-169.8% per year).

Earnings vs Market: IRET's earnings are forecast to decline over the next 3 years (-169.8% per year).

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

Revenue vs Market: IRET's revenue (3.2% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: IRET's revenue (3.2% 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 IRET's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

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

1.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: IRET has a large one-off gain of $61.5M impacting its September 30 2019 financial results.

Growing Profit Margin: IRET became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: IRET has become profitable over the past 5 years, growing earnings by 1.8% per year.

Accelerating Growth: IRET has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: IRET has become profitable in the last year, making it difficult to compare its past year earnings growth to the REITs industry (8.1%).


Return on Equity

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


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Investors Real Estate 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: IRET has a high level of physical assets or inventory.

Debt Coverage by Assets: IRET's debt is not covered by short term assets (assets are 0x debt).


Financial Institutions Analysis

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

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

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

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

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

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


Next Steps

Dividend

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

3.80%

Current Dividend Yield


Dividend Yield vs Market

company3.8%marketbottom25%1.4%markettop25%3.7%industryaverage3.6%forecastin3Years3.4%

Current dividend yield vs market & industry

Notable Dividend: IRET's dividend (3.91%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: IRET's dividend (3.91%) is in the top 25% of dividend payers in the US market (3.66%)


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (74.1%), IRET's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: IRET's dividends in 3 years are forecast to be thoroughly covered by earnings (3.7% payout ratio).


Next Steps

Management

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

2.6yrs

Average management tenure


CEO

Mark Decker (43yo)

2.8yrs

Tenure

US$1,250,349

Compensation

Mr. Mark O. Decker, Jr., serves as the Chief Executive Officer and Trustee at Investors Real Estate Trust (IRET) since April 27, 2017 and President since joining on August 5, 2016. Mr. Decker has capital m ...


CEO Compensation Analysis

Compensation vs Market: Mark's total compensation ($USD1.25M) is below average for companies of similar size in the US market ($USD2.53M).

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


Management Age and Tenure

2.6yrs

Average Tenure

43yo

Average Age

Experienced Management: IRET's management team is considered experienced (2.6 years average tenure).


Board Age and Tenure

3.3yrs

Average Tenure

59.5yo

Average Age

Experienced Board: IRET's board of directors are considered experienced (3.3 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$14,87212 Mar 19
Emily Nagle Green
EntityIndividual
Shares255
Max PriceUS$58.32

Ownership Breakdown

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


Management Team

  • Karin Wentz (59yo)

    Senior VP & Associate General Counsel

    • Tenure: 13yrs
  • Anne Olson (42yo)

    Executive VP

    • Tenure: 1.6yrs
    • Compensation: US$928.79k
  • Mark Decker (43yo)

    President

    • Tenure: 2.8yrs
    • Compensation: US$1.25m
  • Michelle Saari

    Vice President of Marketing & Communications

    • Tenure: 20.3yrs
  • Nancy Andersen (41yo)

    Senior VP & Chief Accounting Officer

    • Tenure: 4.9yrs
    • Compensation: US$278.77k
  • Jonathan Bishop

    Vice President Finance

    • John Kirchmann (54yo)

      Executive VP & CFO

      • Tenure: 2.6yrs
      • Compensation: US$747.21k
    • Grant Campbell

      Senior Vice President of Investments

      • Tenure: 1.6yrs
    • Julie Letner

      Senior Vice President of Talent & Culture

      • Tenure: 1.4yrs
    • Jean Denn

      Senior Vice President of Operations

      • Tenure: 1yrs

    Board Members

    • Terry Maxwell (58yo)

      Independent Trustee

      • Tenure: 6.2yrs
      • Compensation: US$73.86k
    • Linda J. Keller (70yo)

      Independent Trustee

      • Tenure: 8.3yrs
      • Compensation: US$80.53k
    • Emily Green (61yo)

      Independent Trustee

      • Tenure: 1.9yrs
      • Compensation: US$71.69k
    • Mary Twinem (58yo)

      Independent Trustee

      • Tenure: 1.9yrs
      • Compensation: US$68.86k
    • Michael Dance (62yo)

      Independent Trustee

      • Tenure: 3.8yrs
      • Compensation: US$79.54k
    • John Schissel (53yo)

      Independent Trustee

      • Tenure: 3.8yrs
      • Compensation: US$75.23k
    • Jeff Caira (62yo)

      Independent Chairman of the Board

      • Tenure: 2.8yrs
      • Compensation: US$115.79k
    • Mark Decker (43yo)

      President

      • Tenure: 2.8yrs
      • Compensation: US$1.25m

    Company Information

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


    Key Information

    • Name: Investors Real Estate Trust
    • Ticker: IRET
    • Exchange: NYSE
    • Founded: 1970
    • Industry: Residential REITs
    • Sector: Real Estate
    • Market Cap: US$856.308m
    • Shares outstanding: 11.63m
    • Website: https://www.iretapartments.com

    Number of Employees


    Location

    • Investors Real Estate Trust
    • 1400 31st Avenue SW
    • Suite 60
    • Minot
    • North Dakota
    • 58702
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    IRETNYSE (New York Stock Exchange)YesCommon SharesUSUSDOct 1997
    WXC1DB (Deutsche Boerse AG)YesCommon SharesDEEUROct 1997
    IRET.PRCNYSE (New York Stock Exchange)6.625% CUM PFD CUSUSDSep 2017

    Biography

    IRET is a real estate company focused on the ownership, management, acquisition, redevelopment, and development of apartment communities. As of September 30, 2019, we owned interests in 84 apartment communities consisting of 13,336 apartment homes. IRET's common shares and Series C preferred shares are publicly traded on the New York Stock Exchange (NYSE symbols: "IRET" and "IRET PRC," respectively). 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/22 23:40
    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.