NYSE:PDM

Stock Analysis Report

Piedmont Office Realty Trust

Executive Summary

Piedmont Office Realty Trust, Inc. (NYSE: PDM) is an owner, manager, developer, redeveloper, and operator of high-quality, Class A office properties located primarily in select sub-markets within seven major Eastern U.S.

Rewards

Trading at 42.7% below its fair value

Earnings grew by 109.7% over the past year

Risk Analysis

Earnings are forecast to decline by an average of -12.6% per year for the next 3 years

Unstable dividend track record

Large one-off items impacting financial results



Snowflake Analysis

Good value with proven track record.


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Highwoods Properties

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Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

5.2%

PDM

2.6%

US REITs

2.0%

US Market


1 Year Return

26.7%

PDM

18.5%

US REITs

23.5%

US Market

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

Return vs Market: PDM exceeded the US Market which returned 23.2% over the past year.


Shareholder returns

PDMIndustryMarket
7 Day5.2%2.6%2.0%
30 Day6.5%3.9%4.3%
90 Day11.7%-0.1%12.2%
1 Year32.0%26.7%23.4%18.5%26.1%23.5%
3 Year26.3%8.5%35.5%18.5%53.1%43.2%
5 Year49.6%17.5%46.5%16.2%75.5%56.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Piedmont Office Realty Trust undervalued compared to its fair value and its price relative to the market?

41.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PDM ($22.64) is trading below our estimate of fair value ($39.48)

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


Price To Earnings Ratio

PE vs Industry: PDM is good value based on its PE Ratio (25.5x) compared to the REITs industry average (37.8x).

PE vs Market: PDM is poor value based on its PE Ratio (25.5x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: PDM is good value based on its PB Ratio (1.7x) compared to the US REITs industry average (2x).


Next Steps

Future Growth

How is Piedmont Office Realty Trust forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

-12.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PDM's earnings are forecast to decline over the next 3 years (-12.6% per year).

Earnings vs Market: PDM's earnings are forecast to decline over the next 3 years (-12.6% per year).

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

Revenue vs Market: PDM's revenue (3.6% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: PDM's revenue (3.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PDM's Return on Equity is forecast to be low in 3 years time (4.7%).


Next Steps

Past Performance

How has Piedmont Office Realty Trust performed over the past 5 years?

12.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PDM has a large one-off gain of $64.7M impacting its September 30 2019 financial results.

Growing Profit Margin: PDM's current net profit margins (20.9%) are higher than last year (10.1%).


Past Earnings Growth Analysis

Earnings Trend: PDM's earnings have grown by 12.6% per year over the past 5 years.

Accelerating Growth: PDM's earnings growth over the past year (109.7%) exceeds its 5-year average (12.6% per year).

Earnings vs Industry: PDM earnings growth over the past year (109.7%) exceeded the REITs industry 8.1%.


Return on Equity

High ROE: PDM's Return on Equity (6.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Piedmont Office Realty 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: PDM has a high level of physical assets or inventory.

Debt Coverage by Assets: PDM's debt is not covered by short term assets (assets are 0.1x debt).


Financial Institutions Analysis

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

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

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

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

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

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


Next Steps

Dividend

What is Piedmont Office Realty Trust's current dividend yield, its reliability and sustainability?

3.61%

Current Dividend Yield


Dividend Yield vs Market

company3.6%marketbottom25%1.4%markettop25%3.7%industryaverage3.6%forecastin3Years4.2%

Current dividend yield vs market & industry

Notable Dividend: PDM's dividend (3.71%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: PDM's dividend (3.65%) is low compared to the top 25% of dividend payers in the US market (3.67%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (47.9%), PDM's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: PDM's dividends in 3 years are forecast to be thoroughly covered by earnings (0.4% payout ratio).


Next Steps

Management

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

7.2yrs

Average management tenure


CEO

Christopher Smith (43yo)

0.5yrs

Tenure

US$1,493,466

Compensation

Mr. Christopher Brent Smith has been President of Piedmont Office Realty Trust, Inc. since November 2018 and as its Director since March 19, 2019. He served as Chief Investment Officer of Piedmont Office R ...


CEO Compensation Analysis

Compensation vs Market: Christopher's total compensation ($USD1.49M) is below average for companies of similar size in the US market ($USD4.99M).

Compensation vs Earnings: Christopher's compensation has increased by more than 20% in the past year.


Management Age and Tenure

7.2yrs

Average Tenure

57yo

Average Age

Experienced Management: PDM's management team is seasoned and experienced (7.2 years average tenure).


Board Age and Tenure

4.4yrs

Average Tenure

69.5yo

Average Age

Experienced Board: PDM's board of directors are considered experienced (4.4 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.


Ownership Breakdown

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


Management Team

  • Bob Wiberg (63yo)

    Executive VP of Northeast Region & Head of Development

    • Tenure: 7.2yrs
    • Compensation: US$1.04m
  • Bobby Bowers (62yo)

    CFO, Executive VP & Chief Administrative Officer

    • Tenure: 12.8yrs
    • Compensation: US$2.18m
  • Laura Moon (48yo)

    Chief Accounting Officer & Senior VP

    • Tenure: 12.8yrs
    • Compensation: US$459.94k
  • Chris Kollme

    Executive Vice President of Finance & Strategy

    • Tenure: 2.6yrs
    • Compensation: US$1.15m
  • Thomas McKean

    Senior VP

    • George Wells (56yo)

      Executive Vice President of Real Estate Operations

      • Tenure: 7.6yrs
    • Christopher Smith (43yo)

      President

      • Tenure: 0.5yrs
      • Compensation: US$1.49m
    • Joe Pangburn (58yo)

      Executive Vice President of Southwest Region

      • Tenure: 5.9yrs
    • Eddie Guilbert

      Executive VP of Finance & Treasurer

      • Lisa Tyler

        Vice President of Human Resource


        Board Members

        • Frank McDowell (70yo)

          Chairman of the Board

          • Tenure: 2.7yrs
          • Compensation: US$213.75k
        • Kelly Barrett (55yo)

          Independent Director

          • Tenure: 3.8yrs
          • Compensation: US$151.88k
        • Wes Cantrell (84yo)

          Independent Director

          • Tenure: 12.7yrs
          • Compensation: US$155.00k
        • Dale Taysom (70yo)

          Vice Chairman of the Board

          • Tenure: 3yrs
          • Compensation: US$151.88k
        • Jeff Swope (69yo)

          Independent Director

          • Tenure: 11.3yrs
          • Compensation: US$155.00k
        • Don Miller (56yo)

          Director

          • Tenure: 12.9yrs
          • Compensation: US$5.08m
        • Barbara Lang (75yo)

          Independent Director

          • Tenure: 5yrs
          • Compensation: US$145.00k
        • Christopher Smith (43yo)

          President

          • Tenure: 0.5yrs
          • Compensation: US$1.49m

        Company Information

        Piedmont Office Realty Trust, Inc.'s company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: Piedmont Office Realty Trust, Inc.
        • Ticker: PDM
        • Exchange: NYSE
        • Founded: 1997
        • Industry: Office REITs
        • Sector: Real Estate
        • Market Cap: US$2.927b
        • Shares outstanding: 125.78m
        • Website: https://www.piedmontreit.com

        Number of Employees


        Location

        • Piedmont Office Realty Trust, Inc.
        • 5565 Glenridge Connector
        • Suite 450
        • Atlanta
        • Georgia
        • 30342
        • United States

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        PDMNYSE (New York Stock Exchange)YesClass A Common StockUSUSDFeb 2010

        Biography

        Piedmont Office Realty Trust, Inc. (NYSE: PDM) is an owner, manager, developer, redeveloper, and operator of high-quality, Class A office properties located primarily in select sub-markets within seven major Eastern U.S. office markets. Its geographically-diversified, almost $5 billion portfolio is currently comprised of approximately 17 million square feet (after the sale of 500 West Monroe Street). The Company is a fully-integrated, self-managed real estate investment trust (REIT) with local management offices in each of its major markets and is investment-grade rated by Standard & Poor’s (BBB) and Moody’s (Baa2). At the end of the third quarter, three-fourths of the company’s portfolio was ENERGY STAR certified and approximately 40% was LEED certified. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/18 00:18
        End of Day Share Price2020/01/17 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.