NYSE:RPAI

Stock Analysis Report

Retail Properties of America

Executive Summary

Retail Properties of America, Inc. is a REIT that owns and operates high quality, strategically located open-air shopping centers, including properties with a mixed-use component.

Rewards

Trading at 30.5% below its fair value

Earnings are forecast to grow 44.7% per year

Risk Analysis

Unstable dividend track record

Large one-off items impacting financial results

Profit margins (5.8%) are lower than last year (34.3%)



Snowflake Analysis

Average dividend payer and fair value.


Similar Companies

Brixmor Property Group

NYSE:BRX

Share Price & News

How has Retail Properties of America's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

-0.2%

RPAI

0%

US REITs

0%

US Market


1 Year Return

9.4%

RPAI

0%

US REITs

0%

US Market

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

Return vs Market: RPAI underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

RPAIIndustryMarket
7 Day-0.2%0%0%
30 Day-1.2%0%0%
90 Day-2.4%0%0%
1 Year15.5%9.4%0%0%0%0%
3 Year4.1%-11.4%0%0%0%0%
5 Year-5.0%-25.9%0%0%0%0%

Price Volatility Vs. Market

How volatile is Retail Properties of America's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Retail Properties of America undervalued compared to its fair value and its price relative to the market?

29.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RPAI ($12.93) is trading below our estimate of fair value ($18.6)

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


Price To Earnings Ratio

PE vs Industry: RPAI is poor value based on its PE Ratio (98.6x) compared to the REITs industry average (37.8x).

PE vs Market: RPAI is poor value based on its PE Ratio (98.6x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: RPAI is poor value based on its PEG Ratio (2.2x)


Price to Book Ratio

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


Next Steps

Future Growth

How is Retail Properties of America forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

44.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RPAI's forecast earnings growth (44.7% per year) is above the savings rate (1.7%).

Earnings vs Market: RPAI's earnings (44.7% per year) are forecast to grow faster than the US market (14.3% per year).

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

Revenue vs Market: RPAI's revenue (3.1% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: RPAI's revenue (3.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: RPAI's Return on Equity is forecast to be low in 3 years time (4%).


Next Steps

Past Performance

How has Retail Properties of America performed over the past 5 years?

11.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RPAI has a large one-off loss of $22.2M impacting its September 30 2019 financial results.

Growing Profit Margin: RPAI's current net profit margins (5.8%) are lower than last year (34.3%).


Past Earnings Growth Analysis

Earnings Trend: RPAI's earnings have grown by 11% per year over the past 5 years.

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

Earnings vs Industry: RPAI had negative earnings growth (-83.3%) over the past year, making it difficult to compare to the REITs industry average (8.1%).


Return on Equity

High ROE: RPAI's Return on Equity (1.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Retail Properties of America'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: RPAI has a high level of physical assets or inventory.

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


Financial Institutions Analysis

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

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

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

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

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

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


Next Steps

Dividend

What is Retail Properties of America's current dividend yield, its reliability and sustainability?

5.06%

Current Dividend Yield


Dividend Yield vs Market

company5.1%marketbottom25%0%markettop25%0%industryaverage0%forecastin3Years5.2%

Current dividend yield vs market & industry

Notable Dividend: RPAI's dividend (5.12%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: RPAI's dividend (5.12%) is in the top 25% of dividend payers in the US market (3.66%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, RPAI has been paying a dividend for less than 10 years.

Growing Dividend: RPAI has only been paying a dividend for 8 years, and since then payments have not increased.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (64.5%), RPAI's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: RPAI's dividends in 3 years are forecast to be thoroughly covered by earnings (0.3% payout ratio).


Next Steps

Management

What is the CEO of Retail Properties of America's salary, the management and board of directors tenure and is there insider trading?

2.0yrs

Average management tenure


CEO

Steve Grimes (52yo)

10.3yrs

Tenure

US$5,337,417

Compensation

Mr. Steven P. Grimes, also known as Steve, CPA, has been the Chief Executive Officer of Retail Properties of America, Inc. since October 13, 2009 and has been its Director since March 8, 2011. Mr. Grimes s ...


CEO Compensation Analysis

Compensation vs Market: Steve's total compensation ($USD5.34M) is about average for companies of similar size in the US market ($USD4.99M).

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


Management Age and Tenure

2.0yrs

Average Tenure

49yo

Average Age

Experienced Management: RPAI's management team is considered experienced (2 years average tenure).


Board Age and Tenure

7.7yrs

Average Tenure

59.5yo

Average Age

Experienced Board: RPAI's board of directors are considered experienced (7.7 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

SellUS$90,01427 Aug 19
Gerald Gorski
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares8,073
Max PriceUS$11.15

Ownership Breakdown

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


Management Team

  • Steve Grimes (52yo)

    CEO & Director

    • Tenure: 10.3yrs
    • Compensation: US$5.34m
  • Shane Garrison (49yo)

    President & COO

    • Tenure: 1.7yrs
    • Compensation: US$2.88m
  • Mike Gaiden

    Vice President of Investor Relations

    • Julie Swinehart (43yo)

      Executive VP

      • Tenure: 1.9yrs
      • Compensation: US$1.56m
    • Matt Beverly

      President of Eastern Division

      • Tenure: 5.9yrs
    • Mike Hazinski

      Senior VP & Director of Investments – Western Division

      • Tenure: 2yrs
    • Gerry Wright

      President of Western Region

      • Tenure: 10.9yrs
    • Lauren Whaley

      VP, Director of Human Resources & Compliance Officer

      • Kevin Woods

        Senior VP and Director of Operations & Construction

        • Tim O’Connell

          Vice President of Corporate Communications

          • Tenure: 2yrs

        Board Members

        • Peter Lynch (67yo)

          Independent Director

          • Tenure: 5.7yrs
          • Compensation: US$225.00k
        • Bonnie Biumi (57yo)

          Independent Director

          • Tenure: 4.5yrs
        • Tom Sargeant (60yo)

          Independent Director

          • Tenure: 6.6yrs
          • Compensation: US$235.00k
        • Gerald Gorski (75yo)

          Chairman of the Board

          • Tenure: 9.3yrs
          • Compensation: US$320.01k
        • Steve Grimes (52yo)

          CEO & Director

          • Tenure: 10.3yrs
          • Compensation: US$5.34m
        • Frank Catalano (58yo)

          Independent Director

          • Tenure: 16.8yrs
          • Compensation: US$220.00k
        • Rick Imperiale (59yo)

          Independent Director

          • Tenure: 12yrs
          • Compensation: US$220.00k
        • Rob Gifford (62yo)

          Independent Director

          • Tenure: 3.3yrs
          • Compensation: US$220.00k

        Company Information

        Retail Properties of America, Inc.'s company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: Retail Properties of America, Inc.
        • Ticker: RPAI
        • Exchange: NYSE
        • Founded:
        • Industry: Retail REITs
        • Sector: Real Estate
        • Market Cap: US$2.790b
        • Shares outstanding: 212.99m
        • Website: https://www.rpai.com

        Number of Employees


        Location

        • Retail Properties of America, Inc.
        • 2021 Spring Road
        • Suite 200
        • Oak Brook
        • Illinois
        • 60523
        • United States

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        RPAINYSE (New York Stock Exchange)YesClass A Common StockUSUSDApr 2012

        Biography

        Retail Properties of America, Inc. is a REIT that owns and operates high quality, strategically located open-air shopping centers, including properties with a mixed-use component. As of September 30, 2019, the Company owned 104 retail operating properties in the United States representing 20.0 million square feet. The Company is publicly traded on the New York Stock Exchange under the ticker symbol RPAI. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/26 00:34
        End of Day Share Price2020/01/24 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.