ALEXANDRIA REAL ESTATE EQUIT (ARE) Stock Fundamental Analysis
NYSE:ARE - New York Stock Exchange, Inc. - US0152711091 - REIT - Currency: USD
We assign a fundamental rating of 3 out of 10 to ARE. ARE was compared to 129 industry peers in the Diversified REITs industry. There are concerns on the financial health of ARE while its profitability can be described as average. ARE is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year ARE was profitable.
In the past year ARE had a positive cash flow from operations.
Each year in the past 5 years ARE has been profitable.
Each year in the past 5 years ARE had a positive operating cash flow.
1.2 Ratios
With a Return On Assets value of 0.35%, ARE perfoms like the industry average, outperforming 45.74% of the companies in the same industry.
The Return On Equity of ARE (0.75%) is comparable to the rest of the industry.
Looking at the Return On Invested Capital, with a value of 1.99%, ARE is doing worse than 67.44% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ARE is in line with the industry average of 3.15%.
The last Return On Invested Capital (1.99%) for ARE is above the 3 year average (1.88%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.35% | ||
| ROE | 0.75% | ||
| ROIC | 1.99% |
ROA(3y)0.84%
ROA(5y)1.54%
ROE(3y)1.65%
ROE(5y)2.98%
ROIC(3y)1.88%
ROIC(5y)1.79%
1.3 Margins
ARE has a Profit Margin (4.07%) which is comparable to the rest of the industry.
In the last couple of years the Profit Margin of ARE has declined.
ARE has a Operating Margin of 27.83%. This is in the better half of the industry: ARE outperforms 60.47% of its industry peers.
In the last couple of years the Operating Margin of ARE has remained more or less at the same level.
ARE has a Gross Margin of 71.54%. This is in the better half of the industry: ARE outperforms 65.12% of its industry peers.
ARE's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.83% | ||
| PM (TTM) | 4.07% | ||
| GM | 71.54% |
OM growth 3Y6.37%
OM growth 5Y0.87%
PM growth 3Y-28.91%
PM growth 5Y-16.02%
GM growth 3Y0.65%
GM growth 5Y0.27%
2. Health
2.1 Basic Checks
ARE has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, ARE has about the same amount of shares outstanding.
Compared to 5 years ago, ARE has more shares outstanding
Compared to 1 year ago, ARE has a worse debt to assets ratio.
2.2 Solvency
A Debt/Equity ratio of 0.72 indicates that ARE is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.72, ARE is in the better half of the industry, outperforming 75.97% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | N/A | ||
| Altman-Z | N/A |
ROIC/WACC0.35
WACC5.76%
2.3 Liquidity
ARE has a Current Ratio of 0.24. This is a bad value and indicates that ARE is not financially healthy enough and could expect problems in meeting its short term obligations.
ARE has a Current ratio of 0.24. This is amonst the worse of the industry: ARE underperforms 88.37% of its industry peers.
A Quick Ratio of 0.24 indicates that ARE may have some problems paying its short term obligations.
ARE's Quick ratio of 0.24 is on the low side compared to the rest of the industry. ARE is outperformed by 87.60% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.24 | ||
| Quick Ratio | 0.24 |
3. Growth
3.1 Past
The earnings per share for ARE have decreased strongly by -28.97% in the last year.
Measured over the past years, ARE shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -10.24% on average per year.
The Revenue has been growing slightly by 5.93% in the past year.
Measured over the past years, ARE shows a quite strong growth in Revenue. The Revenue has been growing by 16.12% on average per year.
EPS 1Y (TTM)-28.97%
EPS 3Y-21.98%
EPS 5Y-10.24%
EPS Q2Q%-107.22%
Revenue 1Y (TTM)5.93%
Revenue growth 3Y15.22%
Revenue growth 5Y16.12%
Sales Q2Q%-1.64%
3.2 Future
Based on estimates for the next years, ARE will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.04% on average per year.
The Revenue is expected to grow by 3.66% on average over the next years.
EPS Next Y1%
EPS Next 2Y21.79%
EPS Next 3Y11.04%
EPS Next 5YN/A
Revenue Next Year-3.01%
Revenue Next 2Y0.13%
Revenue Next 3Y-5.43%
Revenue Next 5Y3.66%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 90.22, ARE can be considered very expensive at the moment.
Based on the Price/Earnings ratio, ARE is valued a bit more expensive than the industry average as 60.47% of the companies are valued more cheaply.
The average S&P500 Price/Earnings ratio is at 26.03. ARE is valued rather expensively when compared to this.
A Price/Forward Earnings ratio of 25.68 indicates a quite expensive valuation of ARE.
Based on the Price/Forward Earnings ratio, ARE is valued a bit cheaper than the industry average as 79.07% of the companies are valued more expensively.
ARE is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.94, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 90.22 | ||
| Fwd PE | 25.68 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ARE is valued a bit cheaper than 72.87% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 11.65 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ARE does not grow enough to justify the current Price/Earnings ratio.
PEG (NY)90.22
PEG (5Y)N/A
EPS Next 2Y21.79%
EPS Next 3Y11.04%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 7.38%, ARE is a good candidate for dividend investing.
In the last 3 months the price of ARE has falen by -28.25%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
ARE's Dividend Yield is a higher than the industry average which is at 6.61.
Compared to an average S&P500 Dividend Yield of 2.36, ARE pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.38% |
5.2 History
The dividend of ARE is nicely growing with an annual growth rate of 6.07%!
ARE has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of ARE decreased in the last 3 years.
Dividend Growth(5Y)6.07%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
691.78% of the earnings are spent on dividend by ARE. This is not a sustainable payout ratio.
The dividend of ARE is growing, but earnings are growing more, so the dividend growth is sustainable.
DP691.78%
EPS Next 2Y21.79%
EPS Next 3Y11.04%
68.57
-3.61 (-5%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryDiversified REITs
Earnings (Last)
Earnings (Next)
Inst Owners97.94%
Inst Owner Change-0.69%
Ins Owners1.06%
Ins Owner Change8.36%
Market Cap11.86B
Analysts72.22
Price Target109.06 (59.05%)
Short Float %3.06%
Short Ratio3.14
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.38% |
Yearly Dividend5.22
Dividend Growth(5Y)6.07%
DP691.78%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-125.69%
Min EPS beat(2)-141.07%
Max EPS beat(2)-110.31%
EPS beat(4)1
Avg EPS beat(4)-78.61%
Min EPS beat(4)-141.07%
Max EPS beat(4)6.08%
EPS beat(8)2
Avg EPS beat(8)-74.93%
EPS beat(12)4
Avg EPS beat(12)-28.32%
EPS beat(16)6
Avg EPS beat(16)-17.17%
Revenue beat(2)0
Avg Revenue beat(2)-2.62%
Min Revenue beat(2)-3.14%
Max Revenue beat(2)-2.09%
Revenue beat(4)1
Avg Revenue beat(4)-2.3%
Min Revenue beat(4)-4.16%
Max Revenue beat(4)0.18%
Revenue beat(8)4
Avg Revenue beat(8)-0.7%
Revenue beat(12)8
Avg Revenue beat(12)8.1%
Revenue beat(16)12
Avg Revenue beat(16)13.26%
PT rev (1m)-8.23%
PT rev (3m)-11.94%
EPS NQ rev (1m)-19.71%
EPS NQ rev (3m)-32.93%
EPS NY rev (1m)-44.51%
EPS NY rev (3m)-57.4%
Revenue NQ rev (1m)-1.33%
Revenue NQ rev (3m)-1.44%
Revenue NY rev (1m)-1.14%
Revenue NY rev (3m)-3.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 90.22 | ||
| Fwd PE | 25.68 | ||
| P/S | 3.68 | ||
| P/FCF | N/A | ||
| P/OCF | 8.65 | ||
| P/B | 0.68 | ||
| P/tB | 0.69 | ||
| EV/EBITDA | 11.65 |
EPS(TTM)0.76
EY1.11%
EPS(NY)2.67
Fwd EY3.89%
FCF(TTM)-6.12
FCFYN/A
OCF(TTM)7.93
OCFY11.56%
SpS18.63
BVpS100.96
TBVpS99.34
PEG (NY)90.22
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.35% | ||
| ROE | 0.75% | ||
| ROCE | 2.52% | ||
| ROIC | 1.99% | ||
| ROICexc | 2.02% | ||
| ROICexgc | 2.03% | ||
| OM | 27.83% | ||
| PM (TTM) | 4.07% | ||
| GM | 71.54% | ||
| FCFM | N/A |
ROA(3y)0.84%
ROA(5y)1.54%
ROE(3y)1.65%
ROE(5y)2.98%
ROIC(3y)1.88%
ROIC(5y)1.79%
ROICexc(3y)1.91%
ROICexc(5y)1.83%
ROICexgc(3y)1.93%
ROICexgc(5y)1.85%
ROCE(3y)2.37%
ROCE(5y)2.27%
ROICexcg growth 3Y14.19%
ROICexcg growth 5Y1.72%
ROICexc growth 3Y14.6%
ROICexc growth 5Y2.01%
OM growth 3Y6.37%
OM growth 5Y0.87%
PM growth 3Y-28.91%
PM growth 5Y-16.02%
GM growth 3Y0.65%
GM growth 5Y0.27%
F-Score5
Asset Turnover0.09
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 5.8 | ||
| Cap/Depr | 193.33% | ||
| Cap/Sales | 75.39% | ||
| Interest Coverage | 5.64 | ||
| Cash Conversion | 63.67% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.24 | ||
| Quick Ratio | 0.24 | ||
| Altman-Z | N/A |
F-Score5
WACC5.76%
ROIC/WACC0.35
Cap/Depr(3y)392.1%
Cap/Depr(5y)533.59%
Cap/Sales(3y)146.17%
Cap/Sales(5y)201.48%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-28.97%
EPS 3Y-21.98%
EPS 5Y-10.24%
EPS Q2Q%-107.22%
EPS Next Y1%
EPS Next 2Y21.79%
EPS Next 3Y11.04%
EPS Next 5YN/A
Revenue 1Y (TTM)5.93%
Revenue growth 3Y15.22%
Revenue growth 5Y16.12%
Sales Q2Q%-1.64%
Revenue Next Year-3.01%
Revenue Next 2Y0.13%
Revenue Next 3Y-5.43%
Revenue Next 5Y3.66%
EBIT growth 1Y4.51%
EBIT growth 3Y22.56%
EBIT growth 5Y17.14%
EBIT Next Year181.63%
EBIT Next 3Y44.44%
EBIT Next 5Y35.29%
FCF growth 1Y67.5%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-2.66%
OCF growth 3Y14.2%
OCF growth 5Y17.08%