H&R Real Estate ate Staple (HR.UN) AI Stock Analysis

• Market Cap: C$2.75B
• Dividend Yield: 6.86%
• Average Volume (3M): 635.80K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.59
• Revenue Growth: -0.83%
• EPS Growth: -56.21%
• Country: CA
• Employees: 777
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Diversified
• EPS (TTM): -1.23
• Shares Outstanding: 262,565,580
• 10 Day Avg. Volume: 540,189
• 30 Day Avg. Volume: 635,797
• PEG Ratio: 0.07
• Price to Book (P/B): 0.46
• Price to Sales (P/S): 2.98
• P/FCF Ratio: 10.37
• 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$12.00
• Price Target Upside: 14.39% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 52 Neutral
• Price Target: C$10.00 ▼(-4.67% Downside)

H&R Real Estate Staple's overall stock score reflects a mixed financial performance with profitability challenges, bearish technical indicators, and a high dividend yield. The earnings call highlighted both strengths in certain segments and significant challenges, particularly in asset sales and fair value adjustments. The stock's valuation is attractive for income-focused investors but is tempered by ongoing profitability concerns.

Positive Factors

Technological Innovation

The adoption of AI-driven leasing technology enhances operational efficiency and tenant satisfaction, potentially reducing costs and improving occupancy rates over time.

Healthy Financial Ratios

Maintaining a healthy FFO payout ratio indicates strong cash flow management, supporting sustainable distributions and financial stability.

Office and Retail Segment Performance

Growth in office and retail segments suggests resilience in these areas, contributing to stable income streams and offsetting challenges in other segments.

Negative Factors

Residential Segment Challenges

Declining NOI in the residential segment highlights operational challenges and potential revenue pressure, impacting overall profitability.

Industrial Segment Decline

The decline in the industrial segment's NOI and occupancy rates signals potential structural issues, affecting long-term revenue stability.

Significant Fair Value Adjustments

Large fair value write-downs indicate potential asset devaluation, impacting the balance sheet and future financial flexibility.

H&R Real Estate ate Staple Business Overview & Revenue Model

Company Description

H&R Real Estate Investment Trust (HR.UN) is a Canadian real estate investment trust that primarily focuses on owning, managing, and developing a diverse portfolio of residential, commercial, and industrial properties across Canada and the United States. The trust aims to provide stable and growing cash distributions to its unitholders through strategic acquisitions and property management, leveraging its expertise in real estate operations.

How the Company Makes Money

H&R Real Estate generates revenue primarily through rental income from its diverse portfolio of properties, including retail, office, industrial, and residential assets. The company leases space to various tenants, receiving consistent rental payments that contribute to its cash flow. Additionally, H&R may engage in property development, which can create further income through leasing newly developed spaces or selling properties at a profit. The trust also benefits from long-term leases with tenants, providing stability in its revenue streams. Partnerships with property management firms and real estate brokers enhance its market reach and operational efficiency, contributing to its overall earnings.

H&R Real Estate ate Staple Financial Statement Overview

Summary

The company faces challenges with declining revenues and profitability, as reflected in negative net income and revenue growth. While the balance sheet shows manageable leverage, the negative return on equity indicates profitability issues. Cash flow generation is a concern, with declining free cash flow growth, but cash conversion remains efficient. The company needs to address revenue growth and profitability to improve its financial health.

Income Statement

The income statement shows declining revenue with a negative revenue growth rate of -9.4% TTM. The company has a negative net profit margin of -11.97% TTM, indicating losses. However, the gross profit margin remains relatively healthy at 60.02% TTM, suggesting efficient cost management. The EBIT margin is positive at 10.80% TTM, but the EBITDA margin is low at 4.33% TTM, reflecting potential challenges in operational efficiency.

Balance Sheet

The balance sheet reveals a moderate debt-to-equity ratio of 0.73 TTM, indicating manageable leverage. However, the return on equity is negative at -1.93% TTM, reflecting poor profitability. The equity ratio is stable, suggesting a balanced capital structure, but the negative ROE highlights the need for improved earnings.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth at -9.48% TTM, indicating potential liquidity concerns. The operating cash flow to net income ratio is 0.12 TTM, suggesting limited cash generation relative to net losses. However, the free cash flow to net income ratio is strong at 82.16% TTM, indicating efficient cash conversion despite net losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	813.73M	816.99M	903.63M	834.64M	1.07B	1.10B
Gross Profit	489.71M	499.34M	603.09M	534.95M	661.58M	663.67M
EBITDA	-334.55M	-35.07M	627.04M	506.68M	820.29M	651.82M
Net Income	-410.37M	-119.71M	61.69M	844.82M	597.91M	-624.56M
Balance Sheet
Total Assets	9.61B	10.62B	10.78B	11.41B	10.50B	13.36B
Cash, Cash Equivalents and Short-Term Investments	57.12M	100.35M	64.11M	76.89M	124.14M	62.86M
Total Debt	3.49B	3.54B	3.72B	3.95B	3.92B	6.40B
Total Liabilities	5.15B	5.34B	5.59B	5.93B	5.73B	7.28B
Stockholders Equity	4.46B	5.28B	5.19B	5.49B	4.77B	6.07B
Cash Flow
Free Cash Flow	198.82M	234.48M	253.46M	219.47M	405.02M	373.95M
Operating Cash Flow	244.12M	274.07M	294.63M	255.05M	452.11M	426.93M
Investing Cash Flow	-6.83M	173.15M	112.86M	225.95M	1.50B	-183.24M
Financing Cash Flow	-248.60M	-410.98M	-420.26M	-528.26M	-1.89B	-229.47M

H&R Real Estate ate Staple Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 10.49
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:HR.UN, the sentiment is Neutral. The current price of 10.49 is above the 20-day moving average (MA) of 10.19, below the 50-day MA of 10.69, and below the 200-day MA of 10.66, indicating a neutral trend. The MACD of -0.08 indicates Negative momentum. The RSI at 56.23 is Neutral, neither overbought nor oversold. The STOCH value of 91.65 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:HR.UN.

H&R Real Estate ate Staple Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SGR.UN	78 Outperform	C$910.11M	15.16	6.49%	8.00%	1.80%	46.83%
BTB.UN	78 Outperform	C$356.61M	8.51	8.60%	7.43%	0.92%	92.93%
DIR.UN	72 Outperform	C$3.61B	14.72	5.27%	5.55%	7.31%	74.70%
KMP.UN	71 Outperform	C$2.00B	3.69	18.10%	4.37%	6.19%	79.98%
CRR.UN	67 Neutral	C$2.90B	1,035.33	0.14%	5.75%	6.32%	―
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
HR.UN	52 Neutral	C$2.75B	-6.72	-8.74%	6.86%	-0.83%	-56.21%

H&R Real Estate ate Staple Corporate Events

H&R REIT Sells $1.5 Billion in Retail and Office Properties to Focus on Residential and Industrial Assets

H&R REIT announced the sale of $1.5 billion worth of retail and office properties in Canada and the U.S., aligning with its strategy to simplify its portfolio and focus on residential and industrial assets. The proceeds will be used to strengthen the balance sheet and reduce leverage, with net proceeds of approximately $1.1 billion earmarked for debt repayment. This move will increase the proportion of residential and industrial assets in H&R’s portfolio from 69% to 83%, enhancing long-term value for unitholders. The sales are expected to close by early 2026, subject to customary conditions, and will result in a more streamlined and focused asset base for the company.

H&R REIT Updates Strategic Review and Reports Q3 2025 Financial Results

H&R REIT announced an update on its strategic review process and third-quarter 2025 financial results. The strategic review, initiated in response to acquisition interest, led to negotiations for asset sales worth approximately $2.6 billion, although no en bloc offers were received. The Special Committee overseeing the review has been dissolved, with the Board now managing potential transactions. Financially, the REIT reported a net loss for the quarter, with decreased net operating income and fair value adjustments on real estate assets impacting results.

H&R Real Estate Investment Trust Sets Date for Q3 2025 Earnings Release and Declares October Distribution

H&R Real Estate Investment Trust announced the release date for its third-quarter 2025 financial results, scheduled for November 13, 2025, with a subsequent conference call on November 14, 2025. The company also declared a monthly distribution for October 2025, reflecting its ongoing commitment to delivering value to its stakeholders. This announcement underscores H&R’s strategic focus on residential and industrial properties, aligning with its broader goal of simplifying its business model to enhance long-term growth and sustainability.

H&R REIT Declares September 2025 Distribution Amid Strategic Focus Shift

H&R Real Estate Investment Trust announced a monthly distribution of $0.05 per unit for September 2025, with an annualized rate of $0.60. This distribution reflects H&R’s ongoing commitment to providing value to its unitholders. The company’s strategic focus on residential and industrial properties is expected to drive sustainable long-term growth, as it plans to divest office and retail properties when market conditions are favorable.