NYSE:KRC

Stock Analysis Report

Executive Summary

Kilroy Realty Corporation (KRC), a publicly traded real estate investment trust and member of the S&P MidCap 400 Index, is one of the West Coast’s premier landlords.

Rewards

Trading at 43.6% below its fair value

Earnings are forecast to grow 8.24% per year

Pays a high and reliable dividend of 3.32%

Risk Analysis

Highly volatile share price over past 3 months

Large one-off items impacting financial results

Profit margins (23.1%) are lower than last year (34.3%)

Shareholders have been diluted in the past year



Snowflake Analysis

Established dividend payer and slightly overvalued.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: KRC's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

1.3%

KRC

0.3%

US REITs

2.4%

US Market


1 Year Return

-20.2%

KRC

-20.3%

US REITs

-10.0%

US Market

Return vs Industry: KRC exceeded the US REITs industry which returned -27.1% over the past year.

Return vs Market: KRC underperformed the US Market which returned -15.9% over the past year.


Shareholder returns

KRCIndustryMarket
7 Day1.3%0.3%2.4%
30 Day-10.2%-22.2%-11.0%
90 Day-24.7%-24.2%-19.4%
1 Year-18.1%-20.2%-16.9%-20.3%-8.1%-10.0%
3 Year-11.9%-18.4%-2.8%-15.0%17.3%9.6%
5 Year-3.8%-16.9%15.9%-7.9%36.1%21.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

41.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: KRC ($58.4) is trading below our estimate of fair value ($103.51)

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


Price To Earnings Ratio

PE vs Industry: KRC is poor value based on its PE Ratio (31.2x) compared to the REITs industry average (22.5x).

PE vs Market: KRC is poor value based on its PE Ratio (31.2x) compared to the US market (12.2x).


Price to Earnings Growth Ratio

PEG Ratio: KRC is poor value based on its PEG Ratio (3.8x)


Price to Book Ratio

PB vs Industry: KRC is overvalued based on its PB Ratio (1.4x) compared to the US REITs industry average (1.1x).


Next Steps

Future Growth

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

8.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KRC's forecast earnings growth (8.2% per year) is above the savings rate (1.7%).

Earnings vs Market: KRC's earnings (8.2% per year) are forecast to grow slower than the US market (13.4% per year).

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

Revenue vs Market: KRC's revenue (10.8% per year) is forecast to grow faster than the US market (7% per year).

High Growth Revenue: KRC's revenue (10.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: KRC's Return on Equity is forecast to be low in 3 years time (4.5%).


Next Steps

Past Performance

How has Kilroy Realty performed over the past 5 years?

7.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: KRC has a large one-off gain of $36.8M impacting its December 31 2019 financial results.

Growing Profit Margin: KRC's current net profit margins (23.1%) are lower than last year (34.3%).


Past Earnings Growth Analysis

Earnings Trend: KRC's earnings have grown by 7.3% per year over the past 5 years.

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

Earnings vs Industry: KRC had negative earnings growth (-24.6%) over the past year, making it difficult to compare to the REITs industry average (4.3%).


Return on Equity

High ROE: KRC's Return on Equity (4.7%) is considered low.


Next Steps

Financial Health

How is Kilroy Realty's financial position?


Financial Position Analysis

Short Term Liabilities: KRC's short term assets ($488.2M) do not cover its short term liabilities ($494.6M).

Long Term Liabilities: KRC's short term assets ($488.2M) do not cover its long term liabilities ($3.8B).


Debt to Equity History and Analysis

Debt Level: KRC's debt to equity ratio (77.7%) is considered high.

Reducing Debt: KRC's debt to equity ratio has reduced from 90.5% to 77.7% over the past 5 years.

Debt Coverage: KRC's debt is not well covered by operating cash flow (10.9%).

Interest Coverage: KRC's interest payments on its debt are well covered by EBIT (5.1x coverage).


Balance Sheet


Next Steps

Dividend

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

3.18%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: KRC's dividend (3.32%) is higher than the bottom 25% of dividend payers in the US market (2.07%).

High Dividend: KRC's dividend (3.32%) is low compared to the top 25% of dividend payers in the US market (5.82%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (46.9%), KRC's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: KRC'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?

6.3yrs

Average management tenure


CEO

John Kilroy (70yo)

23.58s

Tenure

US$43,624,774

Compensation

Mr. John B. Kilroy Jr. serves as the Chief Executive Officer, President and Director of Kilroy Realty Corporation since September 1996 and has been its Chairman of the Board since February 28, 2013. Mr. Ki ...


CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD43.62M) is above average for companies of similar size in the US market ($USD7.67M).

Compensation vs Earnings: John's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
John Kilroy
Chairman23.58yrsUS$43.62m0.29% $20.0m
Tyler Rose
Executive VP10.33yrsUS$5.13m0.038% $2.6m
Jeffrey Hawken
Executive VP & COO23.25yrsUS$6.40m0.046% $3.2m
Justin Smart
Executive Vice President of Development & Construction Services19.67yrsUS$4.44m0.093% $6.4m
Jonathan Praw
Senior VP & Chief Investment Officer0.67yrno data0.010% $697.7k
Merryl Werber
Senior VP1.17yrsno data0.0075% $518.4k
Heidi Roth
Executive VP1.17yrsno data0.039% $2.7m
Michelle Ngo
Senior VP & Treasurerno datano datano data
A. Paratte
Executive Vice President of Leasing and Business Development6.25yrsno data0.029% $2.0m
Mike Grisso
Senior Vice President of Development & Land Planning5.75yrsno datano data

6.3yrs

Average Tenure

58yo

Average Age

Experienced Management: KRC's management team is seasoned and experienced (6.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
John Kilroy
Chairman23.58yrsUS$43.62m0.29% $20.0m
Edward Brennan
Lead Independent Director6.08yrsUS$253.78k0.0012% $82.7k
Scott Ingraham
Independent Director12.83yrsUS$190.03k0.0035% $241.8k
Peter Stoneberg
Independent Director5.92yrsUS$183.78k0.0068% $471.2k
Gary Stevenson
Independent Director5.92yrsUS$183.78kno data
Jolie Hunt
Independent Director4.92yrsUS$181.28kno data

6.0yrs

Average Tenure

64.5yo

Average Age

Experienced Board: KRC's board of directors are considered experienced (6 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold 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 3.2%.


Top Shareholders

Company Information

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


Key Information

  • Name: Kilroy Realty Corporation
  • Ticker: KRC
  • Exchange: NYSE
  • Founded: 1947
  • Industry: Office REITs
  • Sector: Real Estate
  • Implied Market Cap: US$6.949b
  • Market Cap: US$7.016b
  • Shares outstanding: 117.09m
  • Website: https://www.kilroyrealty.com

Number of Employees


Location

  • Kilroy Realty Corporation
  • 12200 West Olympic Boulevard
  • Suite 200
  • Los Angeles
  • California
  • 90064
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
KRCNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1997
KRCDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1997

Biography

Kilroy Realty Corporation (KRC), a publicly traded real estate investment trust and member of the S&P MidCap 400 Index, is one of the West Coast’s premier landlords. The company has over 70 years of experience developing, acquiring and managing office and mixed-use real estate assets. The company provides physical work environments that foster creativity and productivity and serves a broad roster of dynamic, innovation-driven tenants, including technology, entertainment, digital media and health care companies. At December 31, 2019, the company’s stabilized portfolio totaled approximately 13.5 million square feet of office space located in the coastal regions of Los Angeles, San Diego, the San Francisco Bay Area and Greater Seattle and 200 residential units located in the Hollywood submarket of Los Angeles. The stabilized portfolio was 94.6% occupied and 97.0% leased. In addition, KRC had under construction six projects totaling approximately 2.3 million square feet of office and life science space that were 89% leased and 564 residential units. KRC also had 237 residential units in lease-up, which was 50% leased, and two projects in the tenant improvement phase, The Exchange on 16th, totaling 750,000 square feet, and One Paseo retail, totaling 96,000 square feet, that were both 100% leased. The company’s commitment and leadership position in sustainability has been recognized by various industry groups across the world. In December 2019, the company was recognized by GRESB as the sustainability leader in the Americas across all asset classes for the sixth time. Other sustainability accolades include NAREIT’s Leader in the Light award for the past six years and the EPA’s highest honor of ENERGY STAR Partner of the Year Sustained Excellence award for the past four years. The company is listed in the Dow Jones Sustainability World Index. At the end of the fourth quarter, the company’s stabilized portfolio was 64% LEED certified and 70% of eligible properties were ENERGY STAR certified under the new scoring methodology. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/08 02:51
End of Day Share Price2020/04/07 00:00
Earnings2019/12/31
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.