OTCPK:UTGP.F

Stock Analysis Report

Executive Summary

Unite Students is the UK's largest manager and developer of purpose-built student accommodation serving the country's world-leading higher education sector.


Snowflake Analysis

Undervalued second-rate dividend payer.


Similar Companies

Share Price & News

How has Unite Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

0%

UTGP.F

-4.7%

US REITs

-7.6%

US Market


1 Year Return

n/a

UTGP.F

11.6%

US REITs

10.2%

US Market

Return vs Industry: Insufficient data to determine how UTGP.F performed against the US REITs industry.

Return vs Market: Insufficient data to determine how UTGP.F performed against the US Market.


Shareholder returns

UTGP.FIndustryMarket
7 Day0%-4.7%-7.6%
30 Day0%-1.5%-4.5%
90 Day0%0.9%-0.6%
1 Yearn/a16.1%11.6%12.5%10.2%
3 Year93.3%93.3%31.7%15.3%37.1%28.3%
5 Yearn/a52.7%21.3%60.8%43.2%

Price Volatility Vs. Market

How volatile is Unite Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Unite Group undervalued compared to its fair value and its price relative to the market?

32.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: UTGP.F ($13.05) is trading below our estimate of fair value ($19.28)

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


Price To Earnings Ratio

PE vs Industry: UTGP.F is good value based on its PE Ratio (13.1x) compared to the REITs industry average (37.8x).

PE vs Market: UTGP.F is good value based on its PE Ratio (13.1x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: UTGP.F is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: UTGP.F is good value based on its PB Ratio (1.4x) compared to the US REITs industry average (2x).


Next Steps

Future Growth

How is Unite Group forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

11.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: UTGP.F's forecast earnings growth (11.5% per year) is above the savings rate (2.7%).

Earnings vs Market: UTGP.F's earnings (11.5% per year) are forecast to grow slower than the US market (14.3% per year).

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

Revenue vs Market: UTGP.F's revenue (16.2% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: UTGP.F's revenue (16.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

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


Next Steps

Past Performance

How has Unite Group performed over the past 5 years?

7.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: UTGP.F has a large one-off gain of £139.6M impacting its June 30 2019 financial results.

Growing Profit Margin: UTGP.F's current net profit margins are lower than last year .


Past Earnings Growth Analysis

Earnings Trend: UTGP.F's earnings have grown by 7.4% per year over the past 5 years.

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

Earnings vs Industry: UTGP.F had negative earnings growth (-14.1%) over the past year, making it difficult to compare to the REITs industry average (8.1%).


Return on Equity

High ROE: UTGP.F's Return on Equity (10.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Unite Group'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: UTGP.F has a low level of unsold assets or inventory.

Debt Coverage by Assets: UTGP.F's debt is not covered by short term assets (assets are 0.3x debt).


Financial Institutions Analysis

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

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

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

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

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

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


Next Steps

Dividend

What is Unite Group's current dividend yield, its reliability and sustainability?

2.44%

Current Dividend Yield


Dividend Yield vs Market

company2.4%marketbottom25%1.5%markettop25%4.0%industryaverage3.7%forecastin3Years3.2%

Current dividend yield vs market & industry

Notable Dividend: UTGP.F's dividend (2.44%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: UTGP.F's dividend (2.44%) is low compared to 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, UTGP.F has been paying a dividend for less than 10 years.

Growing Dividend: UTGP.F's dividend payments have increased, but the company has only paid a dividend for 8 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (97%), UTGP.F's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: UTGP.F's dividends in 3 years are forecast to be covered by earnings (83.3% payout ratio).


Next Steps

Management

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

6.5yrs

Average management tenure


CEO

Richard Smith (45yo)

3.4yrs

Tenure

UK£1,995,708

Compensation

Mr. Richard S. Smith has been the Chief Executive Officer of The Unite Group plc since June 2016 and has been its Executive Director since January 1, 2012. Mr. Smith served as the Managing Director of Oper ...


CEO Compensation Analysis

Compensation vs Market: Richard's total compensation ($USD2.58M) is below average for companies of similar size in the US market ($USD4.99M).

Compensation vs Earnings: Richard's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Richard Smith
CEO & Director3.4yrsUK£2.00m0.078% £3.5m
Joseph Lister
CFO & Director11.8yrsUK£1.64m0.15% £6.9m
Caroline Hall
PA to CFO & Corporate Development Director0yrsno datano data
Christopher Szpojnarowicz
Company Secretary6.5yrsno datano data
Candice Macdonald
Head of Corporate Communications0yrsno datano data
Mark Creedy
Managing Director of Fund Management0yrsno datano data
John Blanshard
Chief Customer Officer0yrsno datano data

6.5yrs

Average Tenure

49.5yo

Average Age

Experienced Management: UTGP.F's management team is seasoned and experienced (6.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Richard Smith
CEO & Director3.4yrsUK£2.00m0.078% £3.5m
Joseph Lister
CFO & Director11.8yrsUK£1.64m0.15% £6.9m
Philip White
Independent Chairman of the Board10.5yrsUK£190.14k0.0047% £208.2k
Richard Akers
Non-Executive Director1.2yrsUK£16.22kno data
Elizabeth McMeikan
Senior Independent Director1.8yrsUK£63.14k0.0023% £101.0k
Ross Paterson
Non-Executive Director2.2yrsUK£56.25k0.0025% £109.9k
R. J. Wilson
Independent Director8.9yrsUK£54.95k0.0022% £96.5k
Shirley Pearce
Non-Executive Director0yrsno datano data
Ilaria Del Beato
Non-Executive Director0.9yrsUK£4.26kno data

5.0yrs

Average Tenure

55yo

Average Age

Experienced Board: UTGP.F's board of directors are considered experienced (5 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 6%.


Top Shareholders

Company Information

The Unite Group plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Unite Group plc
  • Ticker: UTGP.F
  • Exchange: OTCPK
  • Founded: 1991
  • Industry: Residential REITs
  • Sector: Real Estate
  • Market Cap: UK£3.454b
  • Listing Market Cap: UK£4.467b
  • Shares outstanding: 290.95m
  • Website: https://www.unite-group.co.uk

Number of Employees


Location

  • The Unite Group plc
  • South Quay House
  • Temple Back
  • Bristol
  • BS1 6FL
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
UTGLSE (London Stock Exchange)YesOrdinary SharesGBGBPJun 1999
U1BDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJun 1999
UTGP.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJun 1999
UTGLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJun 1999

Biography

Unite Students is the UK's largest manager and developer of purpose-built student accommodation serving the country's world-leading higher education sector. We currently provide homes for almost 50,000 students in circa 130 properties across 22 leading university towns and cities in England and Scotland. Unite also has a strong development pipeline, which will deliver more than 6,000 beds in the next three years. Our 1,400 people are driven by a common purpose: to provide the students who live with us a 'Home for Success' and to be the most trusted brand in the sector. We do this through quality service, quality people and quality properties, all designed on the basis of an unrivalled insight into students' needs and preferences. Unite's accommodation is high quality, safe and secure, and located close to university campuses, transport links and local amenities. Students live predominantly in en-suite study bedrooms with rents covering all bills, insurance, 24-hour security, fortnightly cleaning services and high-speed Wi-Fi. MyUnite, our mobile app, provides practical support such as instant messaging and maintenance requests. Our commitment to customer service is powered by an innovative, in-house operating platform. It provides a wide range of benefits to our students, such as an optimised online booking process, as well as providing us with a unique ability to drive value from our portfolio through scale efficiencies and revenue management. Alongside delivering quality service, our other strategic priority is delivering growing and sustainable earnings, underpinned by a strong capital structure. A key part of this strategy is growing the number of beds let though partnerships with mid and high tariff universities which are experiencing record levels of student demand. We currently partner with 60 higher education institutions, guaranteeing that approximately 60% of our rooms are let under multiyear, 'nomination agreements' providing high visibility of forward occupancy and rental growth. Unite is invested in and operates two specialist funds and joint ventures with institutional investment partners: the £2 billion Unite UK Student Accommodation Fund (USAF), and the £1 billion London Student Accommodation Vehicle (LSAV). Unite is the founder of and major donor to the Unite Foundation, a charitable trust established to support talented students facing challenging financial circumstances through the provision of free accommodation annual scholarships. The Foundation has so far provided scholarships for 250 young people working in close collaboration with 28 universities. Founded in 1991 in Bristol, Unite Group is an award-winning Real Estate Investment Trust (REIT), listed on the London Stock Exchange and a member of the FTSE 250 Index. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/21 00:37
End of Day Share Price2019/08/23 00:00
Earnings2019/06/30
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.