Spirit Realty Capital Inc (SRC) Stock Fundamental Analysis
NYSE:SRC - New York Stock Exchange, Inc. - US84860W3007 - REIT - Currency: USD
We assign a fundamental rating of 4 out of 10 to SRC. SRC was compared to 130 industry peers in the Diversified REITs industry. While SRC belongs to the best of the industry regarding profitability, there are concerns on its financial health. While showing a medium growth rate, SRC is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year SRC was profitable.
SRC had a positive operating cash flow in the past year.
SRC had positive earnings in each of the past 5 years.
SRC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of SRC (2.87%) is better than 74.40% of its industry peers.
SRC has a better Return On Equity (5.52%) than 76.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 3.14%, SRC is in the better half of the industry, outperforming 63.20% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for SRC is in line with the industry average of 3.16%.
The 3 year average ROIC (2.96%) for SRC is below the current ROIC(3.14%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.87% | ||
| ROE | 5.52% | ||
| ROIC | 3.14% |
ROA(3y)1.89%
ROA(5y)2.17%
ROE(3y)3.49%
ROE(5y)3.92%
ROIC(3y)2.96%
ROIC(5y)3.19%
1.3 Margins
Looking at the Profit Margin, with a value of 32.87%, SRC belongs to the top of the industry, outperforming 87.20% of the companies in the same industry.
SRC's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 44.35%, SRC belongs to the best of the industry, outperforming 88.80% of the companies in the same industry.
In the last couple of years the Operating Margin of SRC has grown nicely.
SRC has a Gross Margin of 95.85%. This is amongst the best in the industry. SRC outperforms 96.00% of its industry peers.
SRC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 44.35% | ||
| PM (TTM) | 32.87% | ||
| GM | 95.85% |
OM growth 3Y-3.89%
OM growth 5Y2.83%
PM growth 3Y6.81%
PM growth 5Y17.76%
GM growth 3Y-0.21%
GM growth 5Y0.51%
2. Health
2.1 Basic Checks
SRC has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for SRC has been increased compared to 1 year ago.
The debt/assets ratio for SRC is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.58, we must say that SRC is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of SRC (0.58) is comparable to the rest of the industry.
A Debt/Equity ratio of 0.85 indicates that SRC is somewhat dependend on debt financing.
The Debt to Equity ratio of SRC (0.85) is better than 64.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.85 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.58 |
ROIC/WACC0.45
WACC6.93%
2.3 Liquidity
A Current Ratio of 0.61 indicates that SRC may have some problems paying its short term obligations.
SRC has a worse Current ratio (0.61) than 77.60% of its industry peers.
SRC has a Quick Ratio of 0.61. This is a bad value and indicates that SRC is not financially healthy enough and could expect problems in meeting its short term obligations.
SRC has a Quick ratio of 0.58. This is in the lower half of the industry: SRC underperforms 77.60% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.61 | ||
| Quick Ratio | 0.58 |
3. Growth
3.1 Past
SRC shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -7.41%.
Measured over the past years, SRC shows a very strong growth in Earnings Per Share. The EPS has been growing by 20.59% on average per year.
The Revenue has grown by 10.57% in the past year. This is quite good.
Measured over the past years, SRC shows a quite strong growth in Revenue. The Revenue has been growing by 10.47% on average per year.
EPS 1Y (TTM)-7.41%
EPS 3Y1%
EPS 5Y20.59%
EPS Q2Q%-53.7%
Revenue 1Y (TTM)10.57%
Revenue growth 3Y11.18%
Revenue growth 5Y10.47%
Sales Q2Q%5.74%
3.2 Future
SRC is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -7.61% yearly.
The Revenue is expected to grow by 6.45% on average over the next years.
EPS Next Y-16.82%
EPS Next 2Y-17.44%
EPS Next 3Y-10.67%
EPS Next 5Y-7.61%
Revenue Next Year7.73%
Revenue Next 2Y5.01%
Revenue Next 3Y4.5%
Revenue Next 5Y6.45%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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
SRC is valuated rather expensively with a Price/Earnings ratio of 24.18.
Based on the Price/Earnings ratio, SRC is valued a bit cheaper than the industry average as 70.40% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.45, SRC is valued at the same level.
A Price/Forward Earnings ratio of 30.43 indicates a quite expensive valuation of SRC.
76.00% of the companies in the same industry are more expensive than SRC, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.90, SRC is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.18 | ||
| Fwd PE | 30.43 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SRC is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 14.94 |
4.3 Compensation for Growth
SRC has an outstanding profitability rating, which may justify a higher PE ratio.
SRC's earnings are expected to decrease with -10.67% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)1.17
EPS Next 2Y-17.44%
EPS Next 3Y-10.67%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 6.33%, SRC is a good candidate for dividend investing.
SRC's Dividend Yield is a higher than the industry average which is at 6.64.
SRC's Dividend Yield is rather good when compared to the S&P500 average which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.33% |
5.2 History
The dividend of SRC decreases each year by -6.14%.
SRC has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of SRC decreased recently.
Dividend Growth(5Y)-6.14%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
154.84% of the earnings are spent on dividend by SRC. This is not a sustainable payout ratio.
The Dividend Rate of SRC has been decling, while earnings will also be declining. This means the current dividend is most likely not sustainable.
DP154.84%
EPS Next 2Y-17.44%
EPS Next 3Y-10.67%
42.31
-0.67 (-1.56%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryDiversified REITs
Earnings (Last)
Earnings (Next)
Inst Owners2.68%
Inst Owner Change0%
Ins Owners1.79%
Ins Owner Change0%
Market Cap5.99B
Analysts70
Price Target44.35 (4.82%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.33% |
Yearly Dividend2.67
Dividend Growth(5Y)-6.14%
DP154.84%
Div Incr Years1
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-16.33%
Min EPS beat(2)-30.76%
Max EPS beat(2)-1.9%
EPS beat(4)2
Avg EPS beat(4)17.92%
Min EPS beat(4)-30.76%
Max EPS beat(4)80.68%
EPS beat(8)5
Avg EPS beat(8)22.01%
EPS beat(12)7
Avg EPS beat(12)11.62%
EPS beat(16)7
Avg EPS beat(16)-18.12%
Revenue beat(2)1
Avg Revenue beat(2)0.87%
Min Revenue beat(2)-0.54%
Max Revenue beat(2)2.27%
Revenue beat(4)2
Avg Revenue beat(4)0.43%
Min Revenue beat(4)-0.84%
Max Revenue beat(4)2.27%
Revenue beat(8)5
Avg Revenue beat(8)0.74%
Revenue beat(12)9
Avg Revenue beat(12)3%
Revenue beat(16)11
Avg Revenue beat(16)2.33%
PT rev (1m)0.77%
PT rev (3m)4.29%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.72%
EPS NY rev (1m)0%
EPS NY rev (3m)-5.08%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.1%
Revenue NY rev (1m)-0.09%
Revenue NY rev (3m)0.7%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.18 | ||
| Fwd PE | 30.43 | ||
| P/S | 7.94 | ||
| P/FCF | N/A | ||
| P/OCF | 11.49 | ||
| P/B | 1.33 | ||
| P/tB | 1.54 | ||
| EV/EBITDA | 14.94 |
EPS(TTM)1.75
EY4.14%
EPS(NY)1.39
Fwd EY3.29%
FCF(TTM)-2.18
FCFYN/A
OCF(TTM)3.68
OCFY8.7%
SpS5.33
BVpS31.74
TBVpS27.4
PEG (NY)N/A
PEG (5Y)1.17
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.87% | ||
| ROE | 5.52% | ||
| ROCE | 3.97% | ||
| ROIC | 3.14% | ||
| ROICexc | 3.19% | ||
| ROICexgc | 3.45% | ||
| OM | 44.35% | ||
| PM (TTM) | 32.87% | ||
| GM | 95.85% | ||
| FCFM | N/A |
ROA(3y)1.89%
ROA(5y)2.17%
ROE(3y)3.49%
ROE(5y)3.92%
ROIC(3y)2.96%
ROIC(5y)3.19%
ROICexc(3y)2.97%
ROICexc(5y)3.2%
ROICexgc(3y)3.26%
ROICexgc(5y)3.54%
ROCE(3y)3.75%
ROCE(5y)4.03%
ROICexcg growth 3Y-6.63%
ROICexcg growth 5Y10.42%
ROICexc growth 3Y-5.64%
ROICexc growth 5Y10.32%
OM growth 3Y-3.89%
OM growth 5Y2.83%
PM growth 3Y6.81%
PM growth 5Y17.76%
GM growth 3Y-0.21%
GM growth 5Y0.51%
F-Score4
Asset Turnover0.09
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.85 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 5.9 | ||
| Cap/Depr | 264.97% | ||
| Cap/Sales | 109.9% | ||
| Interest Coverage | 2.36 | ||
| Cash Conversion | 80.48% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.61 | ||
| Quick Ratio | 0.58 | ||
| Altman-Z | 0.58 |
F-Score4
WACC6.93%
ROIC/WACC0.45
Cap/Depr(3y)482.02%
Cap/Depr(5y)473.62%
Cap/Sales(3y)200.85%
Cap/Sales(5y)186.47%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-7.41%
EPS 3Y1%
EPS 5Y20.59%
EPS Q2Q%-53.7%
EPS Next Y-16.82%
EPS Next 2Y-17.44%
EPS Next 3Y-10.67%
EPS Next 5Y-7.61%
Revenue 1Y (TTM)10.57%
Revenue growth 3Y11.18%
Revenue growth 5Y10.47%
Sales Q2Q%5.74%
Revenue Next Year7.73%
Revenue Next 2Y5.01%
Revenue Next 3Y4.5%
Revenue Next 5Y6.45%
EBIT growth 1Y5.32%
EBIT growth 3Y6.86%
EBIT growth 5Y13.59%
EBIT Next Year104.37%
EBIT Next 3Y29.69%
EBIT Next 5Y24.14%
FCF growth 1Y60.06%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y35.99%
OCF growth 3Y12.79%
OCF growth 5Y4.31%