RMR GROUP INC/THE - A (RMR) Stock Fundamental Analysis
NASDAQ:RMR - Nasdaq - US74967R1068 - Common Stock - Currency: USD
Taking everything into account, RMR scores 5 out of 10 in our fundamental rating. RMR was compared to 64 industry peers in the Real Estate Management & Development industry. RMR scores excellent on profitability, but there are some minor concerns on its financial health. RMR has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
RMR had positive earnings in the past year.
RMR had a positive operating cash flow in the past year.
Each year in the past 5 years RMR has been profitable.
RMR had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
RMR has a better Return On Assets (3.06%) than 82.81% of its industry peers.
Looking at the Return On Equity, with a value of 8.49%, RMR belongs to the top of the industry, outperforming 82.81% of the companies in the same industry.
RMR has a Return On Invested Capital of 7.87%. This is amongst the best in the industry. RMR outperforms 93.75% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for RMR is significantly above the industry average of 5.47%.
The last Return On Invested Capital (7.87%) for RMR is well below the 3 year average (15.75%), which needs to be investigated, but indicates that RMR had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.06% | ||
| ROE | 8.49% | ||
| ROIC | 7.87% |
ROA(3y)6.39%
ROA(5y)6.08%
ROE(3y)16.48%
ROE(5y)15.45%
ROIC(3y)15.75%
ROIC(5y)14.56%
1.3 Margins
Looking at the Profit Margin, with a value of 2.47%, RMR is in the better half of the industry, outperforming 70.31% of the companies in the same industry.
RMR's Profit Margin has declined in the last couple of years.
With a decent Operating Margin value of 6.45%, RMR is doing good in the industry, outperforming 71.88% of the companies in the same industry.
In the last couple of years the Operating Margin of RMR has declined.
Looking at the Gross Margin, with a value of 36.18%, RMR is in the better half of the industry, outperforming 65.63% of the companies in the same industry.
In the last couple of years the Gross Margin of RMR has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.45% | ||
| PM (TTM) | 2.47% | ||
| GM | 36.18% |
OM growth 3Y-19.87%
OM growth 5Y-25.59%
PM growth 3Y-24.18%
PM growth 5Y-24.54%
GM growth 3Y-6.25%
GM growth 5Y-8.54%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so RMR is creating value.
The number of shares outstanding for RMR has been increased compared to 1 year ago.
RMR has more shares outstanding than it did 5 years ago.
RMR has a worse debt/assets ratio than last year.
2.2 Solvency
RMR has an Altman-Z score of 2.82. This is not the best score and indicates that RMR is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of RMR (2.82) is better than 71.88% of its industry peers.
RMR has a Debt/Equity ratio of 0.37. This is a healthy value indicating a solid balance between debt and equity.
RMR's Debt to Equity ratio of 0.37 is in line compared to the rest of the industry. RMR outperforms 56.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.37 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.82 |
ROIC/WACC0.93
WACC8.48%
2.3 Liquidity
A Current Ratio of 2.51 indicates that RMR has no problem at all paying its short term obligations.
RMR's Current ratio of 2.51 is fine compared to the rest of the industry. RMR outperforms 70.31% of its industry peers.
RMR has a Quick Ratio of 2.51. This indicates that RMR is financially healthy and has no problem in meeting its short term obligations.
Looking at the Quick ratio, with a value of 2.51, RMR is in the better half of the industry, outperforming 76.56% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.51 | ||
| Quick Ratio | 2.51 |
3. Growth
3.1 Past
RMR shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -27.17%.
The earnings per share for RMR have been decreasing by -19.11% on average. This is quite bad
RMR shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -18.14%.
RMR shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.70% yearly.
EPS 1Y (TTM)-27.17%
EPS 3Y-9.71%
EPS 5Y-19.11%
EPS Q2Q%-28.21%
Revenue 1Y (TTM)-18.14%
Revenue growth 3Y13.92%
Revenue growth 5Y4.7%
Sales Q2Q%-23.46%
3.2 Future
RMR is expected to show a very negative growth in Earnings Per Share. In the coming years, the EPS will decrease by -12.87% yearly.
Based on estimates for the next years, RMR will show a decrease in Revenue. The Revenue will decrease by -4.07% on average per year.
EPS Next Y-22.19%
EPS Next 2Y-12.87%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year-8.95%
Revenue Next 2Y-4.07%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
RMR is valuated correctly with a Price/Earnings ratio of 13.03.
84.38% of the companies in the same industry are more expensive than RMR, based on the Price/Earnings ratio.
RMR's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.54.
A Price/Forward Earnings ratio of 14.47 indicates a correct valuation of RMR.
89.06% of the companies in the same industry are more expensive than RMR, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of RMR to the average of the S&P500 Index (36.44), we can say RMR is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.03 | ||
| Fwd PE | 14.47 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, RMR is valued cheaply inside the industry as 93.75% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 8.47 |
4.3 Compensation for Growth
RMR has a very decent profitability rating, which may justify a higher PE ratio.
A cheap valuation may be justified as RMR's earnings are expected to decrease with -12.87% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-12.87%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 10.29%, RMR is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.53, RMR pays a better dividend. On top of this RMR pays more dividend than 100.00% of the companies listed in the same industry.
RMR's Dividend Yield is rather good when compared to the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 10.29% |
5.2 History
The dividend of RMR has a limited annual growth rate of 3.94%.
RMR has paid a dividend for at least 10 years, which is a reliable track record.
RMR has decreased its dividend in the last 3 years.
Dividend Growth(5Y)3.94%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
153.94% of the earnings are spent on dividend by RMR. This is not a sustainable payout ratio.
The Dividend Rate of RMR has been growing, while earnings will be declining. This means the dividend growth is most likely not sustainable.
DP153.94%
EPS Next 2Y-12.87%
EPS Next 3YN/A
17.46
-0.04 (-0.23%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryReal Estate Management & Development
Earnings (Last)
Earnings (Next)
Inst Owners74.19%
Inst Owner Change-0.18%
Ins Owners2.58%
Ins Owner Change0%
Market Cap556.62M
Analysts74.29
Price Target24.48 (40.21%)
Short Float %2.51%
Short Ratio3.08
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 10.29% |
Yearly Dividend1.69
Dividend Growth(5Y)3.94%
DP153.94%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-2.79%
Min EPS beat(2)-6.02%
Max EPS beat(2)0.44%
EPS beat(4)1
Avg EPS beat(4)-5.56%
Min EPS beat(4)-11.41%
Max EPS beat(4)0.44%
EPS beat(8)4
Avg EPS beat(8)-1.77%
EPS beat(12)5
Avg EPS beat(12)-3.18%
EPS beat(16)7
Avg EPS beat(16)-0.34%
Revenue beat(2)0
Avg Revenue beat(2)-21.04%
Min Revenue beat(2)-23%
Max Revenue beat(2)-19.07%
Revenue beat(4)0
Avg Revenue beat(4)-14.6%
Min Revenue beat(4)-23%
Max Revenue beat(4)-4.61%
Revenue beat(8)2
Avg Revenue beat(8)-5.05%
Revenue beat(12)5
Avg Revenue beat(12)-1.45%
Revenue beat(16)8
Avg Revenue beat(16)1.02%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-10.14%
EPS NY rev (1m)0%
EPS NY rev (3m)-13.12%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.59%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-7.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.03 | ||
| Fwd PE | 14.47 | ||
| P/S | 0.69 | ||
| P/FCF | N/A | ||
| P/OCF | 8.65 | ||
| P/B | 2.38 | ||
| P/tB | 3.85 | ||
| EV/EBITDA | 8.47 |
EPS(TTM)1.34
EY7.67%
EPS(NY)1.21
Fwd EY6.91%
FCF(TTM)-0.32
FCFYN/A
OCF(TTM)2.02
OCFY11.56%
SpS25.23
BVpS7.35
TBVpS4.53
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.06% | ||
| ROE | 8.49% | ||
| ROCE | 9.38% | ||
| ROIC | 7.87% | ||
| ROICexc | 10.47% | ||
| ROICexgc | 13.36% | ||
| OM | 6.45% | ||
| PM (TTM) | 2.47% | ||
| GM | 36.18% | ||
| FCFM | N/A |
ROA(3y)6.39%
ROA(5y)6.08%
ROE(3y)16.48%
ROE(5y)15.45%
ROIC(3y)15.75%
ROIC(5y)14.56%
ROICexc(3y)30.24%
ROICexc(5y)28.29%
ROICexgc(3y)31.55%
ROICexgc(5y)29.16%
ROCE(3y)18.76%
ROCE(5y)17.35%
ROICexcg growth 3Y-16.53%
ROICexcg growth 5Y-29.02%
ROICexc growth 3Y-22.84%
ROICexc growth 5Y-32.26%
OM growth 3Y-19.87%
OM growth 5Y-25.59%
PM growth 3Y-24.18%
PM growth 5Y-24.54%
GM growth 3Y-6.25%
GM growth 5Y-8.54%
F-Score5
Asset Turnover1.24
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.37 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 1.45 | ||
| Cap/Depr | 948.19% | ||
| Cap/Sales | 9.28% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 107.77% | ||
| Profit Quality | N/A | ||
| Current Ratio | 2.51 | ||
| Quick Ratio | 2.51 | ||
| Altman-Z | 2.82 |
F-Score5
WACC8.48%
ROIC/WACC0.93
Cap/Depr(3y)683.9%
Cap/Depr(5y)444.34%
Cap/Sales(3y)2.94%
Cap/Sales(5y)1.82%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-27.17%
EPS 3Y-9.71%
EPS 5Y-19.11%
EPS Q2Q%-28.21%
EPS Next Y-22.19%
EPS Next 2Y-12.87%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-18.14%
Revenue growth 3Y13.92%
Revenue growth 5Y4.7%
Sales Q2Q%-23.46%
Revenue Next Year-8.95%
Revenue Next 2Y-4.07%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-54.49%
EBIT growth 3Y-8.72%
EBIT growth 5Y-22.09%
EBIT Next Year63.78%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-111.33%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-30.88%
OCF growth 3Y-5.1%
OCF growth 5Y-20.9%