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NECESSITY RETAIL REIT INC/TH (RTL) Stock Fundamental Analysis

NASDAQ:RTL - Nasdaq - US02607T1097 - REIT - Currency: USD

7.61  +0.08 (+1.06%)

After market: 7.61 0 (0%)

Fundamental Rating

3

We assign a fundamental rating of 3 out of 10 to RTL. RTL was compared to 130 industry peers in the Diversified REITs industry. Both the profitability and financial health of RTL have multiple concerns. RTL does not seem to be growing, but still is valued expensively.


Dividend Valuation Growth Profitability Health

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3

1. Profitability

1.1 Basic Checks

In the past year RTL was profitable.
In the past year RTL had a positive cash flow from operations.
In the past 5 years RTL always reported negative net income.
RTL had a positive operating cash flow in each of the past 5 years.
RTL Yearly Net Income VS EBIT VS OCF VS FCFRTL Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 0 -200M -400M -600M -800M

1.2 Ratios

RTL has negative profitability rations, so we won't be analyzing them here.
RTL has a Return On Invested Capital of 0.63%. This is amonst the worse of the industry: RTL underperforms 84.85% of its industry peers.
The Average Return On Invested Capital over the past 3 years for RTL is in line with the industry average of 3.15%.
Industry RankSector Rank
ROA N/A
ROE N/A
ROIC 0.63%
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)1.37%
ROIC(5y)1.23%
RTL Yearly ROA, ROE, ROICRTL Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 0 -2 -4 -6

1.3 Margins

With a Operating Margin value of 7.48%, RTL is not doing good in the industry: 83.33% of the companies in the same industry are doing better.
In the last couple of years the Operating Margin of RTL has grown nicely.
RTL has a better Gross Margin (69.50%) than 60.61% of its industry peers.
RTL's Gross Margin has declined in the last couple of years.
Industry RankSector Rank
OM 7.48%
PM (TTM) N/A
GM 69.5%
OM growth 3Y-9.47%
OM growth 5Y5.39%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-1.73%
GM growth 5Y-1.75%
RTL Yearly Profit, Operating, Gross MarginsRTL Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 0 20 -20 40 60 80

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3

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so RTL is destroying value.
The number of shares outstanding for RTL has been increased compared to 1 year ago.
RTL has a worse debt/assets ratio than last year.
RTL Yearly Shares OutstandingRTL Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 20M 40M 60M 80M 100M
RTL Yearly Total Debt VS Total AssetsRTL Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 1B 2B 3B 4B

2.2 Solvency

RTL has an Altman-Z score of -0.13. This is a bad value and indicates that RTL is not financially healthy and even has some risk of bankruptcy.
RTL's Altman-Z score of -0.13 is on the low side compared to the rest of the industry. RTL is outperformed by 81.82% of its industry peers.
A Debt/Equity ratio of 1.85 is on the high side and indicates that RTL has dependencies on debt financing.
RTL's Debt to Equity ratio of 1.85 is on the low side compared to the rest of the industry. RTL is outperformed by 70.45% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.85
Debt/FCF N/A
Altman-Z -0.13
ROIC/WACC0.1
WACC6.56%
RTL Yearly LT Debt VS Equity VS FCFRTL Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 0 1B 2B

2.3 Liquidity

RTL has a Current Ratio of 2.34. This indicates that RTL is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of RTL (2.34) is better than 81.06% of its industry peers.
A Quick Ratio of 2.34 indicates that RTL has no problem at all paying its short term obligations.
RTL has a Quick ratio of 2.34. This is amongst the best in the industry. RTL outperforms 83.33% of its industry peers.
Industry RankSector Rank
Current Ratio 2.34
Quick Ratio 2.34
RTL Yearly Current Assets VS Current LiabilitesRTL Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 100M 200M 300M

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2

3. Growth

3.1 Past

RTL shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -143.65%.
The Revenue has grown by 17.76% in the past year. This is quite good.
The Revenue has been growing by 10.51% on average over the past years. This is quite good.
EPS 1Y (TTM)-143.65%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-27.59%
Revenue 1Y (TTM)17.76%
Revenue growth 3Y14.2%
Revenue growth 5Y10.51%
Sales Q2Q%-8.75%

3.2 Future

No EPS estimates are available, so we could not analyze the future EPS growth and evolution.
No Revenue estimates are available, so we could not analyze the future revenue growth and evolution.
EPS Next YN/A
EPS Next 2YN/A
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next YearN/A
Revenue Next 2YN/A
Revenue Next 3YN/A
Revenue Next 5YN/A

3.3 Evolution

No EPS estimates are available, so we could not analyze the future EPS growth and evolution.
No Revenue estimates are available, so we could not analyze the future revenue growth and evolution.
RTL Yearly Revenue VS EstimatesRTL Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2016 2017 2018 2019 2020 2021 2022 100M 200M 300M 400M
RTL Yearly EPS VS EstimatesRTL Yearly EPS VS EstimatesYearly EPS VS Estimates 2018 2019 2020 0 0.5

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3

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 7.85, which indicates a rather cheap valuation of RTL.
Compared to the rest of the industry, the Price/Earnings ratio of RTL indicates a rather cheap valuation: RTL is cheaper than 99.24% of the companies listed in the same industry.
RTL is valuated cheaply when we compare the Price/Earnings ratio to 26.99, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 7.85
Fwd PE N/A
RTL Price Earnings VS Forward Price EarningsRTL Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 0 0 0 0 0

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of RTL is on the same level as its industry peers.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 14.09
RTL Per share dataRTL EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 2 4 6 8 10

4.3 Compensation for Growth

PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2YN/A
EPS Next 3YN/A

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5

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 11.17%, RTL is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 6.85, RTL pays a better dividend. On top of this RTL pays more dividend than 94.70% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, RTL pays a better dividend.
Industry RankSector Rank
Dividend Yield 11.17%

5.2 History

The dividend of RTL decreases each year by -1.15%.
RTL has been paying a dividend for over 5 years, so it has already some track record.
RTL has decreased its dividend recently.
Dividend Growth(5Y)-1.15%
Div Incr Years0
Div Non Decr Years1
RTL Yearly Dividends per shareRTL Yearly Dividends per shareYearly Dividends per share 2018 2019 2020 2021 2022 2023 0.5 1 1.5

5.3 Sustainability

The earnings of RTL are negative and hence is the payout ratio. RTL will probably not be able to sustain this dividend level.
DP-84.63%
EPS Next 2YN/A
EPS Next 3YN/A
RTL Yearly Income VS Free CF VS DividendRTL Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 0 -200M -400M -600M -800M

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NECESSITY RETAIL REIT INC/TH

NASDAQ:RTL (9/11/2023, 10:21:53 PM)

After market: 7.61 0 (0%)

7.61

+0.08 (+1.06%)

Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryDiversified REITs
Earnings (Last)08-02 2023-08-02/amc
Earnings (Next)10-31 2023-10-31/amc
Inst OwnersN/A
Inst Owner Change-17.68%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap0
Analysts80
Price Target10.71 (40.74%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 11.17%
Yearly Dividend1.05
Dividend Growth(5Y)-1.15%
DP-84.63%
Div Incr Years0
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)N/A
Avg Revenue beat(2)N/A
Min Revenue beat(2)N/A
Max Revenue beat(2)N/A
Revenue beat(4)N/A
Avg Revenue beat(4)N/A
Min Revenue beat(4)N/A
Max Revenue beat(4)N/A
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)10.53%
PT rev (3m)10.53%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)N/A
EPS NY rev (3m)N/A
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)N/A
Revenue NY rev (3m)N/A
Valuation
Industry RankSector Rank
PE 7.85
Fwd PE N/A
P/S 2.25
P/FCF N/A
P/OCF 10.9
P/B 0.71
P/tB 0.71
EV/EBITDA 14.09
EPS(TTM)0.97
EY12.75%
EPS(NY)N/A
Fwd EYN/A
FCF(TTM)-0.09
FCFYN/A
OCF(TTM)0.7
OCFY9.17%
SpS3.38
BVpS10.67
TBVpS10.67
PEG (NY)N/A
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA N/A
ROE N/A
ROCE 0.8%
ROIC 0.63%
ROICexc 0.64%
ROICexgc 0.64%
OM 7.48%
PM (TTM) N/A
GM 69.5%
FCFM N/A
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)1.37%
ROIC(5y)1.23%
ROICexc(3y)1.42%
ROICexc(5y)1.27%
ROICexgc(3y)1.43%
ROICexgc(5y)1.33%
ROCE(3y)1.73%
ROCE(5y)1.57%
ROICexcg growth 3Y-10.1%
ROICexcg growth 5Y6.61%
ROICexc growth 3Y-5.7%
ROICexc growth 5Y8.8%
OM growth 3Y-9.47%
OM growth 5Y5.39%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-1.73%
GM growth 5Y-1.75%
F-Score4
Asset Turnover0.1
Health
Industry RankSector Rank
Debt/Equity 1.85
Debt/FCF N/A
Debt/EBITDA 10.33
Cap/Depr 47.63%
Cap/Sales 23.3%
Interest Coverage N/A
Cash Conversion N/A
Profit Quality N/A
Current Ratio 2.34
Quick Ratio 2.34
Altman-Z -0.13
F-Score4
WACC6.56%
ROIC/WACC0.1
Cap/Depr(3y)285.4%
Cap/Depr(5y)279.41%
Cap/Sales(3y)121.61%
Cap/Sales(5y)119.82%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-143.65%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-27.59%
EPS Next YN/A
EPS Next 2YN/A
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)17.76%
Revenue growth 3Y14.2%
Revenue growth 5Y10.51%
Sales Q2Q%-8.75%
Revenue Next YearN/A
Revenue Next 2YN/A
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-60.69%
EBIT growth 3Y3.39%
EBIT growth 5Y16.46%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-1643.46%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y6.63%
OCF growth 3Y13.62%
OCF growth 5Y10.86%