OTCPK:RIOC.F

Stock Analysis Report

RioCan Real Estate Investment Trust

Executive Summary

RioCan is one of Canada’s largest real estate investment trusts, with a total enterprise value of approximately $14.9 billion as at September 30, 2019.

Rewards

Trading at 29.3% below its fair value

Earnings grew by 32% over the past year

Pays a high and reliable dividend of 5.38%

Risk Analysis

Large one-off items impacting financial results



Snowflake Analysis

6 star dividend payer and undervalued.

Share Price & News

How has RioCan Real Estate Investment Trust's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

4.5%

RIOC.F

2.6%

US REITs

2.0%

US Market


1 Year Return

12.7%

RIOC.F

18.5%

US REITs

23.5%

US Market

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

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


Shareholder returns

RIOC.FIndustryMarket
7 Day4.5%2.6%2.0%
30 Day1.9%3.9%4.3%
90 Day2.7%-0.1%12.2%
1 Year19.1%12.7%23.4%18.5%26.1%23.5%
3 Year25.6%5.8%35.5%18.5%53.1%43.2%
5 Year15.0%-12.7%46.5%16.2%75.5%56.1%

Price Volatility Vs. Market

How volatile is RioCan Real Estate Investment Trust's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is RioCan Real Estate Investment Trust undervalued compared to its fair value and its price relative to the market?

27.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RIOC.F ($20.52) is trading below our estimate of fair value ($29.01)

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


Price To Earnings Ratio

PE vs Industry: RIOC.F is good value based on its PE Ratio (10.5x) compared to the REITs industry average (37.8x).

PE vs Market: RIOC.F is good value based on its PE Ratio (10.5x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate RIOC.F's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: RIOC.F is good value based on its PB Ratio (1x) compared to the US REITs industry average (2x).


Next Steps

Future Growth

How is RioCan Real Estate Investment Trust forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

-1.3%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if RIOC.F's forecast earnings growth is above the savings rate (1.7%).

Earnings vs Market: Insufficient data to determine if RIOC.F's earnings are forecast to grow faster than the US market

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

Revenue vs Market: RIOC.F's revenue is expected to decline over the next 3 years (-1.3% per year).

High Growth Revenue: RIOC.F's revenue is forecast to decline over the next 3 years (-1.3% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if RIOC.F's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has RioCan Real Estate Investment Trust performed over the past 5 years?

11.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RIOC.F has a large one-off gain of CA$246.1M impacting its September 30 2019 financial results.

Growing Profit Margin: RIOC.F's current net profit margins (57.6%) are higher than last year (49.1%).


Past Earnings Growth Analysis

Earnings Trend: RIOC.F's earnings have grown by 11.4% per year over the past 5 years.

Accelerating Growth: RIOC.F's earnings growth over the past year (32%) exceeds its 5-year average (11.4% per year).

Earnings vs Industry: RIOC.F earnings growth over the past year (32%) exceeded the REITs industry 8.1%.


Return on Equity

High ROE: RIOC.F's Return on Equity (9.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is RioCan Real Estate Investment 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: RIOC.F has a high level of physical assets or inventory.

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


Financial Institutions Analysis

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

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

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

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

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

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


Next Steps

Dividend

What is RioCan Real Estate Investment Trust's current dividend yield, its reliability and sustainability?

5.25%

Current Dividend Yield


Dividend Yield vs Market

company5.2%marketbottom25%1.4%markettop25%3.7%industryaverage3.6%forecastin3Years5.2%

Current dividend yield vs market & industry

Notable Dividend: RIOC.F's dividend (5.38%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: RIOC.F's dividend (5.38%) is in the top 25% of dividend payers in the US market (3.66%)


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (77.4%), RIOC.F's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: RIOC.F'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 RioCan Real Estate Investment Trust's salary, the management and board of directors tenure and is there insider trading?

2.3yrs

Average management tenure


CEO

Ed Sonshine (72yo)

27yrs

Tenure

CA$6,706,961

Compensation

Mr. Edward Sonshine, also known as Ed, O.Ont., Q.C., B.A, LL.B, is the Founder of Riocan Real Estate Investment Trust and has been its Chief Executive Officer since 1993. Mr. Sonshine has been Advisor to t ...


CEO Compensation Analysis

Compensation vs Market: Ed's total compensation ($USD5.13M) is about average for companies of similar size in the US market ($USD6.46M).

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


Management Age and Tenure

2.3yrs

Average Tenure

Experienced Management: RIOC.F's management team is considered experienced (2.3 years average tenure).


Board Age and Tenure

8.8yrs

Average Tenure

66yo

Average Age

Experienced Board: RIOC.F's board of directors are considered experienced (8.8 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

BuyUS$59,01506 Sep 19
Jonathan Gitlin
EntityIndividual
Role
President
President & COO
Shares3,000
Max PriceUS$19.67
SellUS$2,37314 Aug 19
Sharon Sallows
EntityIndividual
Role
Member of the Board of Directors
Independent Trustee
Shares120
Max PriceUS$19.78
BuyUS$27,42012 Aug 19
Jonathan Gitlin
EntityIndividual
Role
President
President & COO
Shares1,379
Max PriceUS$19.88
BuyUS$39,96121 Jun 19
Jonathan Gitlin
EntityIndividual
Role
President
President & COO
Shares1,980
Max PriceUS$20.18
SellUS$852,68619 Jun 19
John Ballantyne
EntityIndividual
Shares42,500
Max PriceUS$20.09
BuyUS$57,41329 May 19
Jonathan Gitlin
EntityIndividual
Role
President
President & COO
Shares2,940
Max PriceUS$19.55
BuyUS$49,86614 May 19
Richard Dansereau
EntityIndividual
Role
Member of the Board of Directors
Independent Trustee
Shares2,550
Max PriceUS$19.56
BuyUS$67,08409 May 19
S. Marshall
EntityIndividual
Role
Member of the Board of Directors
Independent Trustee
Shares3,500
Max PriceUS$19.17

Ownership Breakdown

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


Management Team

  • Ed Sonshine (72yo)

    CEO & Trustee

    • Tenure: 27yrs
    • Compensation: CA$6.71m
  • Jeff Ross

    Senior Vice President of Leasing & Tenant Coordination

    • Tenure: 12yrs
    • Compensation: CA$1.36m
  • Sandra Levy

    Vice President of Human Resources

    • Tenure: 1.4yrs
  • Qi Tang

    Senior VP & CFO

    • Tenure: 2.8yrs
    • Compensation: CA$1.20m
  • Jonathan Gitlin

    President & COO

    • Tenure: 0.8yrs
    • Compensation: CA$1.50m
  • Oliver Harrison

    Senior Vice President of Operations

    • Tenure: 0.7yrs
  • Christian Green

    Assistant Vice President

    • Terri Andrianopoulos

      Vice President of Corporate Marketing & Communications

      • Tenure: 2.3yrs
    • Jennifer Suess

      Senior VP

      • Tenure: 2.4yrs
    • Ryan Donkers

      Vice President of Investments

      • Tenure: 1.5yrs

    Board Members

    • Siim Vanaselja (62yo)

      Independent Trustee

      • Tenure: 2.7yrs
      • Compensation: CA$207.00k
    • Ed Sonshine (72yo)

      CEO & Trustee

      • Tenure: 27yrs
      • Compensation: CA$6.71m
    • Chuck Winograd (71yo)

      Independent Trustee

      • Tenure: 10.9yrs
      • Compensation: CA$198.50k
    • Dale Lastman (61yo)

      • Tenure: 15.6yrs
      • Compensation: CA$176.50k
    • Paul Godfrey (80yo)

      Independent Chairman of the Board

      • Compensation: CA$375.00k
    • Sharon Sallows (70yo)

      Independent Trustee

      • Tenure: 20.6yrs
      • Compensation: CA$214.00k
    • Richard Dansereau (58yo)

      Independent Trustee

      • Tenure: 1.7yrs
      • Compensation: CA$164.50k
    • Bonnie Brooks (66yo)

      Independent Trustee

      • Tenure: 6.6yrs
      • Compensation: CA$188.50k
    • S. Marshall (62yo)

      Independent Trustee

      • Tenure: 4.6yrs
      • Compensation: CA$207.50k

    Company Information

    RioCan Real Estate Investment Trust's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: RioCan Real Estate Investment Trust
    • Ticker: RIOC.F
    • Exchange: OTCPK
    • Founded:
    • Industry: Retail REITs
    • Sector: Real Estate
    • Market Cap: CA$8.713b
    • Listing Market Cap: CA$6.665b
    • Shares outstanding: 317.66m
    • Website: https://www.riocan.com

    Number of Employees


    Location

    • RioCan Real Estate Investment Trust
    • RioCan Yonge Eglinton Centre
    • Suite 500
    • Toronto
    • Ontario
    • M4P 1E4
    • Canada

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    REI.UNTSX (The Toronto Stock Exchange)YesTrust UnitsCACADJan 1994
    R7GDB (Deutsche Boerse AG)YesTrust UnitsDEEURJan 1994
    RIOC.FOTCPK (Pink Sheets LLC)YesTrust UnitsUSUSDJan 1994

    Biography

    RioCan is one of Canada’s largest real estate investment trusts, with a total enterprise value of approximately $14.9 billion as at September 30, 2019. RioCan owns, manages and develops retail-focused, increasingly mixed-use properties located in prime, high-density transit-oriented areas where Canadians want to shop, live and work. As at September 30, 2019, our portfolio is comprised of 225 properties with an aggregate net leasable area of approximately 39.3 million square feet including residential rental and 14 development properties as at September 30, 2019 (at RioCan's Interest). 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/18 00:20
    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.