Granite Real Estate (GRT.UN) AI Stock Analysis

• Market Cap: C$5.32B
• Dividend Yield: 4.18%
• Average Volume (3M): 85.21K
• Price to Earnings (P/E): 18.6
• Beta (1Y): 0.84
• Revenue Growth: 9.81%
• EPS Growth: -3.42%
• Country: CA
• Employees: 70
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Industrial
• EPS (TTM): 1.12
• Shares Outstanding: 60,590,990
• 10 Day Avg. Volume: 73,610
• 30 Day Avg. Volume: 85,207
• PEG Ratio: 0.07
• Price to Book (P/B): 0.76
• Price to Sales (P/S): 7.69
• P/FCF Ratio: 12.93
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$88.75
• Price Target Upside: 1.02% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: C$98.00 ▲(11.55% Upside)

Granite Real Estate's strong financial performance and positive earnings call sentiment are the primary drivers of its score. While technical indicators suggest caution, the company's solid valuation and attractive dividend yield provide a balanced investment opportunity.

Positive Factors

Free Cash Flow Conversion

Nearly one-to-one conversion of earnings into free cash flow indicates durable cash generation from operations. This supports sustained distributions, funds development or acquisitions without dilutive equity, and provides flexibility to pay down debt or build liquidity over the medium term.

Balance Sheet Strength & Liquidity

A sizable asset base with a modest net leverage ratio and ~ $1B liquidity gives Granite capacity to pursue accretive acquisitions, fund developments, and withstand market stress. This structural financial flexibility supports ongoing distributions and strategic growth.

Leasing Momentum and Pricing Power

High leasing spreads, substantial lease-up activity and strong renewal performance point to persistent demand for industrial space. That pricing power drives NOI and FFO growth sustainably, reducing vacancy risk and improving long-term cash flow visibility.

Negative Factors

Slowing Revenue Growth

Modest, decelerating revenue growth means organic top-line expansion is weak, making the REIT more reliant on acquisitions or development to lift FFO. This structural constraint can limit sustainable distribution growth if external growth capital is constrained.

Rising Operating Costs and Capex

Material quarter-over-quarter increases in G&A and AFFO-related capital expenditures indicate growing overhead and capital intensity. Persistently higher operating and maintenance outlays can compress AFFO margins and reduce cash available for distributions or reinvestment.

Higher Leverage and Interest Cost Sensitivity

Rising indebtedness and recent draws on the credit facility increase interest expense and financial leverage. That raises sensitivity to rate hikes and could constrain capital allocation, limiting the REIT's ability to pursue growth or maintain distribution increases if costs continue to climb.

Granite Real Estate Business Overview & Revenue Model

Company Description

Granite is a Canadian-based REIT engaged in the acquisition, development, ownership and management of logistics, warehouse and industrial properties in North America and Europe. Granite owns 108 investment properties representing approximately 45.3 million square feet of leasable area.

How the Company Makes Money

Granite Real Estate generates revenue primarily through leasing its industrial properties to tenants under long-term lease agreements. The company's revenue model is centered around rental income, which is derived from both fixed and variable lease components. Key revenue streams include base rent, as well as additional income from property management services and recoveries of property operating expenses. Granite benefits from strong demand in the logistics and e-commerce sectors, which drives occupancy rates and rental growth. The company may also engage in strategic partnerships with logistics firms and developers to enhance its property portfolio and increase its market presence. Overall, Granite's earnings are bolstered by its diversified tenant base and long-term lease agreements, providing stability and predictability in cash flows.

Granite Real Estate Financial Statement Overview

Summary

Granite Real Estate exhibits strong financial health with robust profitability and efficient cash flow management. However, increasing debt levels and decelerating revenue growth could be potential areas of concern.

Income Statement

Granite Real Estate shows strong profitability with high gross and net profit margins, indicating efficient operations. The TTM (Trailing-Twelve-Months) revenue growth is modest at 1.87%, suggesting stable but slow growth. The EBIT and EBITDA margins are robust, reflecting effective cost management. However, the revenue growth rate has decelerated compared to previous years, which could be a concern for future expansion.

Balance Sheet

The company maintains a healthy balance sheet with a moderate debt-to-equity ratio of 0.60, indicating reasonable leverage. The return on equity is relatively low at 6.01%, suggesting limited profitability from shareholders' investments. The equity ratio is strong, highlighting a solid asset base. However, the increasing debt levels over the years could pose a risk if not managed carefully.

Cash Flow

Granite Real Estate demonstrates strong cash flow management with a significant free cash flow growth rate of 4.26% TTM. The operating cash flow to net income ratio is healthy, indicating efficient cash generation relative to earnings. The free cash flow to net income ratio is nearly 1, showing effective conversion of earnings into cash. The consistent growth in free cash flow over the years is a positive indicator for financial stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	604.98M	569.14M	521.25M	455.58M	393.49M	340.20M
Gross Profit	497.34M	471.99M	435.24M	380.36M	332.68M	293.04M
EBITDA	388.41M	480.48M	203.14M	346.73M	293.51M	260.98M
Net Income	290.62M	360.61M	136.66M	155.77M	1.31B	429.80M
Balance Sheet
Total Assets	9.63B	9.62B	9.07B	9.28B	8.57B	6.75B
Cash, Cash Equivalents and Short-Term Investments	127.93M	126.17M	116.13M	135.08M	402.51M	831.28M
Total Debt	3.34B	3.11B	3.10B	3.07B	2.46B	2.21B
Total Liabilities	4.12B	3.88B	3.78B	3.80B	3.25B	2.83B
Stockholders Equity	5.51B	5.73B	5.28B	5.48B	5.32B	3.92B
Cash Flow
Free Cash Flow	374.81M	338.48M	312.90M	276.69M	261.68M	179.03M
Operating Cash Flow	374.94M	338.61M	313.18M	277.50M	262.26M	244.32M
Investing Cash Flow	-92.25M	-65.46M	-128.13M	-766.56M	-1.03B	-1.07B
Financing Cash Flow	-291.21M	-267.50M	-203.11M	214.56M	333.48M	1.36B

Granite Real Estate Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 87.85
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:GRT.UN, the sentiment is Positive. The current price of 87.85 is above the 20-day moving average (MA) of 86.50, above the 50-day MA of 81.15, and above the 200-day MA of 73.86, indicating a bullish trend. The MACD of 1.66 indicates Positive momentum. The RSI at 60.99 is Neutral, neither overbought nor oversold. The STOCH value of 26.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:GRT.UN.

Granite Real Estate Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRT.UN	82 Outperform	C$3.91B	8.38	11.49%	5.74%	4.11%	35.99%
GRT.UN	73 Outperform	C$5.32B	18.62	5.31%	4.18%	9.81%	-3.42%
DIR.UN	72 Outperform	C$3.69B	15.02	5.27%	5.56%	7.31%	74.70%
CRR.UN	70 Outperform	C$2.91B	1,040.00	0.14%	5.82%	6.32%	―
SRU.UN	68 Neutral	C$4.55B	18.20	5.03%	7.22%	0.48%	96.32%
FCR.UN	68 Neutral	C$4.20B	17.05	6.18%	4.71%	-0.83%	-28.93%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%