Spirit Realty Capital (NYSE:SRC) - Share price, News & Analysis

Q: What is the Fair Price of SRC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

SRC ($44.73) is trading below our estimate of [[fair value]] ($165.72)

SRC fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	2/6
Past Performance	5/6
Financial Health	2/6
Dividends	4/6

SRC Stock Overview

Spirit Realty Capital, Inc. (NYSE: SRC) is a premier net-lease REIT that primarily invests in single-tenant, operationally essential real estate assets, subject to long-term leases.

Rewards

Trading at 73% below our estimate of its fair value

Earnings are forecast to grow 6.19% per year

Earnings grew by 79.9% over the past year

Risk Analysis

Interest payments are not well covered by earnings

Unstable dividend track record

Shareholders have been diluted in the past year

Spirit Realty Capital Competitors

Brixmor Property Group

NYSE:BRX

US$7.2b

Agree Realty

NYSE:ADC

US$6.3b

National Retail Properties

NYSE:NNN

US$8.5b

Phillips Edison

NasdaqGS:PECO

US$4.5b

Price History & Performance

Summary of all time highs, changes and price drops for Spirit Realty Capital
Historical stock prices
Current Share Price	US$44.73
52 Week High	US$52.29
52 Week Low	US$35.79
Beta	1.27
1 Month Change	10.97%
3 Month Change	6.45%
1 Year Change	-12.12%
3 Year Change	-3.33%
5 Year Change	6.37%
Change since IPO	-4.01%

Recent News & Updates

May 13

Spirit Realty Capital: Spirit-Lifting Dividends And Upside Potential

Spirit Realty Capital is a net-lease REIT that benefits from stable cash flows and long-dated maturities. The company's portfolio is protected by significant diversification and increased exposure to higher quality assets and tenants. Shares in SRC are down significantly YTD and are currently trading near their lows, with a dividend yield of over 6.5%. At just 11.4x forward AFFO, shares are discounted to historical averages and the sector median.

Shareholder Returns

	SRC	US REITs	US Market
7D	5.0%	4.5%	3.2%
1Y	-12.1%	-3.6%	-10.1%

Return vs Industry: SRC underperformed the US REITs industry which returned -4.6% over the past year.

Return vs Market: SRC matched the US Market which returned -11.7% over the past year.

Price Volatility

Is SRC's price volatile compared to industry and market?
SRC volatility
SRC Average Weekly Movement	4.1%
REITs Industry Average Movement	4.3%
Market Average Movement	7.7%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	3.2%

Stable Share Price: SRC is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: SRC's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2003	84	Jackson Hsieh	https://www.spiritrealty.com

Spirit Realty Capital, Inc. (NYSE: SRC) is a premier net-lease REIT that primarily invests in single-tenant, operationally essential real estate assets, subject to long-term leases. As of September 30, 2020, our diverse portfolio of 1,778 owned properties, with an aggregate leasable area of 37.2 million square feet in 48 states, included retail, industrial and office buildings leased to 296 tenants across 28 retail industries.

Spirit Realty Capital Fundamentals Summary

How do Spirit Realty Capital's earnings and revenue compare to its market cap?
SRC fundamental statistics
Market Cap	US$6.10b
Earnings (TTM)	US$213.13m
Revenue (TTM)	US$651.94m

28.6x

P/E Ratio

9.4x

P/S Ratio

Is SRC overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
SRC income statement (TTM)
Revenue	US$651.94m
Cost of Revenue	US$29.00m
Gross Profit	US$622.94m
Other Expenses	US$409.81m
Earnings	US$213.13m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	1.56
Gross Margin	95.55%
Net Profit Margin	32.69%
Debt/Equity Ratio	78.6%

How did SRC perform over the long term?

See historical performance and comparison

Dividends

5.7%

Current Dividend Yield

72%

Payout Ratio

Does SRC pay a reliable dividends?

See SRC dividend history and benchmarks

When do you need to buy SRC by to receive an upcoming dividend?
Spirit Realty Capital dividend dates
Ex Dividend Date	Sep 29 2022
Dividend Pay Date	Oct 14 2022
Days until Ex dividend	47 days
Days until Dividend pay date	62 days

Does SRC pay a reliable dividends?

See SRC dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is SRC undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for SRC?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for SRC. This is calculated by dividing SRC's market cap by their current preferred multiple.
What is SRC's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$6.10b

SRC key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	14.9x
Enterprise Value/EBITDA	17x
PEG Ratio	4.6x

Price to Earnings Ratio vs Peers

How does SRC's PE Ratio compare to its peers?

SRC PE Ratio vs Peers

The above table shows the PE ratio for SRC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	55.3x
BRX Brixmor Property Group	24.6x	1.9%	US$7.2b
ADC Agree Realty	46.4x	17.6%	US$6.3b
NNN National Retail Properties	28.6x	6.5%	US$8.5b
PECO Phillips Edison	121.8x	28.1%	US$4.5b
SRC Spirit Realty Capital	28.6x	6.2%	US$6.1b

Price-To-Earnings vs Peers: SRC is good value based on its Price-To-Earnings Ratio (28.6x) compared to the peer average (55.3x).

Price to Earnings Ratio vs Industry

How does SRC's PE Ratio compare vs other companies in the US REITs Industry?

Price-To-Earnings vs Industry: SRC is good value based on its Price-To-Earnings Ratio (28.6x) compared to the US REITs industry average (32.2x)

Price to Earnings Ratio vs Fair Ratio

What is SRC's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

SRC PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	28.6x
Fair PE Ratio	37.1x

Price-To-Earnings vs Fair Ratio: SRC is good value based on its Price-To-Earnings Ratio (28.6x) compared to the estimated Fair Price-To-Earnings Ratio (37.1x).

Share Price vs Fair Value

What is the Fair Price of SRC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: SRC ($44.73) is trading below our estimate of fair value ($165.72)

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

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is Spirit Realty Capital forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

6.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: SRC's forecast earnings growth (6.2% per year) is above the savings rate (1.9%).

Earnings vs Market: SRC's earnings (6.2% per year) are forecast to grow slower than the US market (14.4% per year).

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

Revenue vs Market: SRC's revenue (11.7% per year) is forecast to grow faster than the US market (7.9% per year).

High Growth Revenue: SRC's revenue (11.7% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

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

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Past Performance

How has Spirit Realty Capital performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

17.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: SRC has high quality earnings.

Growing Profit Margin: SRC's current net profit margins (32.7%) are higher than last year (21.9%).

Past Earnings Growth Analysis

Earnings Trend: SRC's earnings have grown by 17.8% per year over the past 5 years.

Accelerating Growth: SRC's earnings growth over the past year (79.9%) exceeds its 5-year average (17.8% per year).

Earnings vs Industry: SRC earnings growth over the past year (79.9%) exceeded the REITs industry 52.3%.

Return on Equity

High ROE: SRC's Return on Equity (5.1%) is considered low.

Discover strong past performing companies

Financial Health

How is Spirit Realty Capital's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: SRC's short term assets ($244.8M) exceed its short term liabilities ($180.4M).

Long Term Liabilities: SRC's short term assets ($244.8M) do not cover its long term liabilities ($3.5B).

Debt to Equity History and Analysis

Debt Level: SRC's net debt to equity ratio (78.5%) is considered high.

Reducing Debt: SRC's debt to equity ratio has reduced from 114.7% to 78.6% over the past 5 years.

Debt Coverage: SRC's debt is not well covered by operating cash flow (13%).

Interest Coverage: SRC's interest payments on its debt are not well covered by EBIT (2.9x coverage).

Balance Sheet

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Dividend

What is Spirit Realty Capital current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

5.71%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: SRC's dividend (5.71%) is higher than the bottom 25% of dividend payers in the US market (1.49%).

High Dividend: SRC's dividend (5.71%) is in the top 25% of dividend payers in the US market (4%)

Stability and Growth of Payments

Stable Dividend: SRC has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: SRC has only been paying a dividend for 9 years, and since then payments have fallen.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (72.3%), SRC's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: At its current cash payout ratio (78.4%), SRC's dividend payments are covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

3.4yrs

Average management tenure

CEO

Jackson Hsieh (61 yo)

5.92yrs

Tenure

US$12,549,978

Compensation

Mr. Jackson Hsieh has been the President, Chief Executive Officer & Director of Spirit Realty Capital since 2019. Mr. Hsieh has been the President and Chief Executive Officer of Spirit Realty Capital, Inc....

CEO Compensation Analysis

Compensation vs Market: Jackson's total compensation ($USD12.55M) is above average for companies of similar size in the US market ($USD8.25M).

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

Leadership Team

Experienced Management: SRC's management team is considered experienced (3.4 years average tenure).

Board Members

Experienced Board: SRC's board of directors are considered experienced (4 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 14.5%.

Data	Last Updated (UTC time)
Company Analysis	2022/08/12 00:00
End of Day Share Price	2022/08/12 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31