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

SRC fundamental analysis
Snowflake Score
Valuation	4/6
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 74.1% below our estimate of its fair value

Earnings are forecast to grow 7.22% per year

Earnings grew by 626% over the past year

Risk Analysis

Interest payments are not well covered by earnings

Unstable dividend track record

Significant insider selling over the past 3 months

Shareholders have been diluted in the past year

Spirit Realty Capital Competitors

Realty Income

NYSE:O

US$40.9b

National Retail Properties

NYSE:NNN

US$7.6b

Agree Realty

NYSE:ADC

US$5.1b

Kite Realty Group Trust

NYSE:KRG

US$4.4b

Price History & Performance

Summary of all time highs, changes and price drops for Spirit Realty Capital
Historical stock prices
Current Share Price	US$40.63
52 Week High	US$52.29
52 Week Low	US$38.74
Beta	1.24
1 Month Change	-15.05%
3 Month Change	-13.18%
1 Year Change	-11.83%
3 Year Change	-4.69%
5 Year Change	12.86%
Change since IPO	-12.81%

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.

Apr 18

Spirit Realty Capital: Buy This 5.6% Yielding Recession-Resistant Trust

Spirit Realty Capital has a strong AFFO forecast in place. Historical occupancy trends, including during the pandemic period, make SRC a top quality REIT to bet on. Low valuation and low payout ratio make SRC a must-buy REIT.

Apr 10

Spirit Realty: My Oh My, Another Strong Buy

What’s most interesting about Spirit Realty right now is the divergence between the direction that the stock’s fundamentals are headed and the direction of the company’s share price. SRC’s share price is down mid-single digits thus far throughout 2022; however, Spirit Realty is expected to post high single digit AFFO growth this year. We give SRC stock a “Safe Strong Buy” rating, making it one of the most intriguing opportunities that we see in the REIT space today.

Shareholder Returns

	SRC	US REITs	US Market
7D	-3.3%	-2.0%	-2.7%
1Y	-11.8%	-2.0%	-12.9%

Return vs Industry: SRC underperformed the US REITs industry which returned -2.8% over the past year.

Return vs Market: SRC matched the US Market which returned -12.7% over the past year.

Price Volatility

Is SRC's price volatile compared to industry and market?
SRC volatility
SRC Average Weekly Movement	4.4%
REITs Industry Average Movement	4.4%
Market Average Movement	7.9%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	3.0%

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$5.46b
Earnings (TTM)	US$218.31m
Revenue (TTM)	US$641.63m

25.0x

P/E Ratio

8.5x

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$641.63m
Cost of Revenue	US$27.97m
Gross Profit	US$613.66m
Other Expenses	US$395.35m
Earnings	US$218.31m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	1.63
Gross Margin	95.64%
Net Profit Margin	34.02%
Debt/Equity Ratio	76.1%

How did SRC perform over the long term?

See historical performance and comparison

Dividends

6.3%

Current Dividend Yield

71%

Payout Ratio

Valuation

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

Valuation Score

4/6

Valuation Score 4/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

>50%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: SRC ($40.63) is trading below our estimate of fair value ($157.05)

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

Price To Earnings Ratio

PE vs Industry: SRC is good value based on its PE Ratio (25x) compared to the US REITs industry average (33.5x).

PE vs Market: SRC is poor value based on its PE Ratio (25x) compared to the US market (15.5x).

Price to Earnings Growth Ratio

PEG Ratio: SRC is poor value based on its PEG Ratio (3.5x)

Price to Book Ratio

PB vs Industry: SRC is good value based on its PB Ratio (1.3x) compared to the US REITs industry average (1.7x).

Future Growth

How is Spirit Realty Capital forecast to perform in the next 1 to 3 years based on estimates from 9 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

7.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: SRC's forecast earnings growth (7.2% per year) is above the savings rate (1.9%).

Earnings vs Market: SRC's earnings (7.2% per year) are forecast to grow slower than the US market (12.5% per year).

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

Revenue vs Market: SRC's revenue (11.3% per year) is forecast to grow faster than the US market (7.8% per year).

High Growth Revenue: SRC's revenue (11.3% 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 (4.8%).

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

15.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: SRC has high quality earnings.

Growing Profit Margin: SRC's current net profit margins (34%) are higher than last year (6.1%).

Past Earnings Growth Analysis

Earnings Trend: SRC's earnings have grown by 15.1% per year over the past 5 years.

Accelerating Growth: SRC's earnings growth over the past year (626%) exceeds its 5-year average (15.1% per year).

Earnings vs Industry: SRC earnings growth over the past year (626%) exceeded the REITs industry 69.5%.

Return on Equity

High ROE: SRC's Return on Equity (5.4%) is considered low.

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 ($234.5M) exceed its short term liabilities ($146.9M).

Long Term Liabilities: SRC's short term assets ($234.5M) do not cover its long term liabilities ($3.4B).

Debt to Equity History and Analysis

Debt Level: SRC's net debt to equity ratio (75.5%) is considered high.

Reducing Debt: SRC's debt to equity ratio has reduced from 101.5% to 76.1% over the past 5 years.

Debt Coverage: SRC's debt is not well covered by operating cash flow (13.1%).

Interest Coverage: SRC's interest payments on its debt are not well covered by EBIT (3x coverage).

Balance Sheet

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
Future Dividend Coverage

6.28%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: SRC's dividend (6.28%) is higher than the bottom 25% of dividend payers in the US market (1.57%).

High Dividend: SRC's dividend (6.28%) is in the top 25% of dividend payers in the US market (4.09%)

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 (70.6%), SRC's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: At its current cash payout ratio (80.7%), SRC's dividend payments are covered by cash flows.

Discover strong dividend paying companies

Management

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

3.2yrs

Average management tenure

CEO

Jackson Hsieh (60 yo)

5.67yrs

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 ($USD12.55M) is above average for companies of similar size in the US market ($USD8.23M).

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 (3.2 years average tenure).

Board Members

Experienced Board: SRC's board of directors are considered experienced (4.4 years average tenure).

Ownership

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

Insider Trading Volume

Insider Buying: SRC insiders have only sold shares 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 16.8%.

Data	Last Updated (UTC time)
Company Analysis	2022/05/21 00:00
End of Day Share Price	2022/05/20 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31