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Ct Real Estate Investment (TSE:CRT.UN)
:CRT.UN
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CT Real Estate Investment
(TSX:CRT.UN)
78Outperform
Positive Factors
Occupancy Rate
CRT's high occupancy rate of 99.4% remains stable, with 700ksf of renewals completed, including significant renewals with Canadian Tire and third-party tenants.
Operating Performance
CRT's operating performance was as expected, with Cash NOI increasing by 3.6% year over year, reflecting contractual rent increases and contributions from capital deployment.
Portfolio Expansion
Portfolio expansion included significant development and acquisitions, adding 322ksf to income properties, showcasing a strong investment strategy.
Negative Factors
Investor Base
CRT's ability to broaden its investor base is somewhat hindered by its single-tenant concentration.
CT Real Estate Investment (CRT.UN) vs. S&P 500 (SPY)
Market Cap
C$3.46B
Dividend Yield6.32%
Average Volume (3M)140.64K
Price to Earnings (P/E)7.9
Beta (1Y)0.88
Revenue Growth4.69%
EPS Growth88.66%
CountryCA
Employees71
SectorReal Estate
Sector Strength73
IndustryREIT - Retail
Share Statistics
EPS (TTM)1.84
Shares Outstanding108,997,550
10 Day Avg. Volume163,187
30 Day Avg. Volume140,642
Financial Highlights & Ratios
PEG Ratio0.09
Price to Book (P/B)N/A
Price to Sales (P/S)6.00
Price to Cash Flow (P/CF)8.00
P/FCF Ratio7.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$15.67Price Target Upside8.44% Upside
Rating ConsensusHold
Number of Analyst Covering3
CT Real Estate Investment Business Overview & Revenue Model
Company DescriptionCT Real Estate Investment Trust (TSX:CRT.UN) is an unincorporated, closed-end real estate investment trust formed to own income-producing commercial properties primarily located in Canada. Its portfolio is comprised of over 350 properties totaling approximately 29 million square feet of GLA, consisting primarily of net leased single-tenant retail properties located across Canada. Canadian Tire Corporation, Limited is CT REIT's most significant tenant.
How the Company Makes MoneyCT Real Estate Investment Trust generates revenue primarily through leasing its retail and commercial properties. The majority of its rental income comes from long-term lease agreements with Canadian Tire Corporation, its anchor tenant, which provides a stable and predictable cash flow. The trust benefits from the strategic partnership with CTC, leveraging CTC's retail network and brand strength. Additional revenue streams include rent escalations, property management fees, and income from other tenants occupying its diversified property portfolio. The trust's financial performance is further enhanced by property development and potential appreciation in property values.
CT Real Estate Investment Financial Statement Overview
Summary
CT Real Estate Investment demonstrates solid financial health with strong revenue and profit growth, a well-managed balance sheet with moderate leverage, and robust cash flow generation. There is a need to monitor leverage levels for long-term stability.Income Statement
CT Real Estate Investment has shown a consistent revenue growth with a current year increase of 4.69% compared to the previous year. The gross profit margin is strong at 78.28%, reflecting efficient cost management. However, the net profit margin has seen significant improvement, reaching 75.05% due to a substantial increase in net income. The EBIT margin is not available for the current year, but the EBITDA margin is outstanding at 96.33%, indicating robust operational performance.79
Positive
Balance Sheet
The company's balance sheet displays a moderately leveraged position with a debt-to-equity ratio of 0.89, which is manageable for a REIT. Return on Equity (ROE) is impressive at 23.77%, showing effective use of equity capital to generate profits. The equity ratio stands at 25.21%, suggesting a stable capital structure but indicating that there may be room to strengthen equity financing.75
Positive
Cash Flow
Cash flow analysis reveals a healthy free cash flow growth rate of 1.60%. The operating cash flow to net income ratio is 1.00, indicating that operating activities are generating ample cash relative to net income. Additionally, the free cash flow to net income ratio is 0.92, which suggests efficient cash generation relative to profits. These metrics reflect a strong cash flow position supporting the company's operations and potential dividends.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 578.69M | 552.77M | 532.79M | 514.54M | 502.35M | Gross Profit |
| 453.00M | 437.25M | 421.66M | 407.25M | 391.58M | EBIT |
| 0.00 | 422.01M | 379.34M | 392.67M | 378.71M | EBITDA |
| 557.48M | 422.01M | 435.29M | 562.58M | 378.71M | Net Income Common Stockholders |
| 434.22M | 105.29M | 324.61M | 351.14M | 75.26M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 3.06M | 20.77M | 2.61M | 3.56M | 4.53M | Total Assets |
| 7.25B | 6.97B | 6.84B | 6.50B | 6.18B | Total Debt |
| 1.63B | 1.53B | 1.44B | 1.30B | 1.27B | Net Debt |
| 1.63B | 1.51B | 1.44B | 1.30B | 1.26B | Total Liabilities |
| 3.15B | 3.12B | 3.02B | 2.82B | 2.80B | Stockholders Equity |
| 1.83B | 1.71B | 1.70B | 1.62B | 1.48B |
| Cash Flow | Free Cash Flow | |||
| 399.62M | 393.31M | 369.13M | 371.34M | 353.21M | Operating Cash Flow |
| 436.04M | 425.06M | 399.27M | 407.20M | 370.77M | Investing Cash Flow |
| -217.84M | -186.53M | -219.62M | -146.77M | -162.68M | Financing Cash Flow |
| -235.91M | -220.37M | -180.60M | -261.41M | -213.29M |
CT Real Estate Investment Technical Analysis
Positive
14.45
Price Trends
14.40
Positive
14.43
Positive
14.35
Positive
Market Momentum
0.02
Negative
61.38
Neutral
45.33
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CRT.UN, the sentiment is Positive. The current price of 14.45 is below the 20-day moving average (MA) of 14.51, above the 50-day MA of 14.40, and above the 200-day MA of 14.35, indicating a bullish trend. The MACD of 0.02 indicates Negative momentum. The RSI at 61.38 is Neutral, neither overbought nor oversold. The STOCH value of 45.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CRT.UN.
CT Real Estate Investment Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | C$3.46B | 7.88 | 11.30% | 6.32% | 4.69% | 88.66% | |
76 Outperform | C$4.30B | 19.01 | 4.50% | 7.32% | 9.46% | -42.77% | |
72 Outperform | C$3.50B | 17.08 | 5.20% | 5.22% | 6.55% | ― | |
61 Neutral | $4.70B | 17.65 | -3.00% | 11.43% | 5.99% | -19.07% |
* Real Estate Sector Average
Performance Comparison
TSE:CRT.UN
CT Real Estate Investment
14.85
2.28
18.14%
RIOCF
RioCan Real Estate Investment
12.05
-0.64
-5.04%
TSE:FCR.UN
First Capital Realty
16.49
1.63
10.97%
TSE:SRU.UN
SmartCentres Real Estate Investment Trust
25.29
4.07
19.18%
PPRQF
Choice Properties Real Estate Investment
9.88
0.53
5.67%
APYRF
Allied Properties Real Estate Investment Trust
11.70
0.28
2.45%
CT Real Estate Investment Earnings Call Summary
Earnings Call Date: Feb 10, 2025 | % Change Since: -0.89% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong performance by CT REIT, with significant growth in key operational metrics and a robust development pipeline. However, there are concerns about rising expenses and anticipated higher financing costs due to debt refinancing at increased interest rates.Highlights
Growth in Key Operating Metrics
CT REIT achieved a 3.6% increase in net operating income, 1.5% growth in same-store NOI, 2% growth in same-property NOI, and 1.7% growth in AFFO per unit for Q4 2024. For the full year, these metrics were up by 4.3%, 1.6%, 2.4%, and 3.0% respectively.
Successful Strategic Investments
CT REIT sourced and delivered nearly 500,000 square feet of new gross leaseable area in 2024, with a total investment of over $156 million.
Strong Development Pipeline
19 projects are in development, expected to add over 600,000 square feet in 2025, with a total committed investment of $328 million.
High Occupancy Rate
CT REIT maintained a 99.4% occupancy rate at the end of Q4, indicating a strong and stable portfolio.
Positive Leasing Activity
Extended over 400,000 square feet of non-Canadian Tire leases at a 10.3% spread over expiring rents.
Lowlights
Increased G&A Expenses
G&A expenses as a percentage of property revenue increased from 2.6% to 2.9% in Q4 2024, driven by higher compensation expenses and timing of expenses.
Interest Coverage and Debt Refinancing Concerns
Interest coverage ratio decreased slightly from 3.60x to 3.52x due to higher interest costs. Anticipated refinancing of $452 million in debt at higher rates in 2025.
Higher Financing Costs
Expected increased net interest expense due to refinancing of maturing debts at higher interest rates.
Company Guidance
During CT REIT's Q4 2024 earnings call, the leadership team, including CEO Kevin Salsberg, highlighted several key metrics underscoring the REIT's financial performance and strategic investments. In Q4, CT REIT posted a 3.6% increase in net operating income (NOI), with same-store NOI rising by 1.5% and same-property NOI by 2%, while adjusted funds from operations (AFFO) per unit grew by 1.7%. For the full year, net operating income increased by 4.3%, same-store NOI by 1.6%, same-property NOI by 2.4%, and AFFO per unit by 3%. These metrics supported the REIT's 11th distribution increase since its IPO in 2013, resulting in a 42% total increase in distributions to unitholders. Despite a challenging investment climate, CT REIT secured nearly 500,000 square feet of new gross leasable area through its development and acquisition program with a total investment of over $156 million. The REIT maintained a robust balance sheet, with a 99.4% occupancy rate and a 7.7-year weighted average lease term, allowing it to pursue new opportunities while managing risks effectively. The REIT also repurchased over 875,000 units at an average cost of $13.50 per unit, demonstrating its commitment to enhancing unitholder value.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.