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Slate Grocery REIT (TSE:SGR.UN)
TSX:SGR.UN
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Slate Grocery REIT
(TSX:SGR.UN)
Rating:76Outperform
Price Target:
C$16.00
▲(11.65% Upside)
Slate Grocery REIT (SGR.UN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$860.35M
Dividend Yield8.44%
Average Volume (3M)100.48K
Price to Earnings (P/E)15.7
Beta (1Y)1.04
Revenue Growth2.96%
EPS Growth17.08%
CountryCA
EmployeesN/A
SectorReal Estate
Sector Strength53
IndustryREIT - Retail
Share Statistics
EPS (TTM)0.23
Shares Outstanding59,009,000
10 Day Avg. Volume143,847
30 Day Avg. Volume100,480
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$13.84Price Target Upside-3.42% Downside
Rating ConsensusHold
Number of Analyst Covering1
Slate Grocery REIT Business Overview & Revenue Model
Company DescriptionSlate Grocery REIT is an owner and operator of U.S. grocery-anchored real estate. The REIT owns and operates approximately U.S. $1.3 billion of critical real estate infrastructure across major U.S. metro markets that communities rely upon for their everyday needs. The REIT's resilient grocery-anchored portfolio and strong credit tenants provide unitholders with durable cash flows and the potential for capital appreciation over the longer term.
How the Company Makes MoneySlate Grocery REIT generates revenue primarily through leasing space in its grocery-anchored retail properties to tenants. The company collects rental income from long-term lease agreements with a diverse mix of necessity-based tenants, including grocery stores, pharmacies, and other essential service providers. This ensures consistent cash flow, as these types of tenants tend to have stable demand regardless of economic cycles. Additionally, Slate Grocery REIT may engage in strategic property acquisitions and dispositions to enhance its portfolio value and optimize returns. The trust's earnings are further supported by its focus on maintaining high occupancy rates and leveraging its strong relationships with major grocery chains and retailers, which can lead to favorable lease agreements and tenant retention.
Slate Grocery REIT Earnings Call Summary
Earnings Call Date:Aug 06, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong leasing volumes, stable occupancy, and effective debt management, contributing to a positive outlook. However, challenges such as higher financing costs impacting net operating income and muted transaction volumes were noted. Overall, the focus on strong fundamentals in the grocery-anchored real estate market indicates a positive sentiment.Q2-2025 Updates
Positive Updates
Strong Leasing Volumes
The REIT achieved strong leasing volumes with renewal spreads at 13.8% above expiring rents and new deals at 28.8% above comparable average in-place rent.
Net Operating Income Growth
Same-property net operating income increased by $5.7 million or 3.6% on a trailing 12-month basis.
Stable Occupancy and Rent Potential
Portfolio occupancy remained stable at 94% with an average in-place rent of $12.77 per square foot, significantly below the market average of $24, indicating potential for rent increases.
Debt Management and Refinancing
The REIT has only $172 million of debt maturing through the end of 2026, refinanced a 4-property portfolio for $39 million, and entered into a $17 million credit facility at attractive spreads.
Interest Rate Management
Amended existing interest rate swaps, extending maturity and achieving a blended weighted average interest rate of 5%.
Negative Updates
Impact of Higher Financing Costs
Higher financing costs are affecting net operating income growth, although the company has managed to achieve a stable interest rate environment.
Limited Transaction Volume
Transaction volume has been muted due to broader real estate market conditions, although there is keen interest in stable U.S. dollar cash flow.
Company Guidance
During the Slate Grocery REIT Second Quarter 2025 Financial Results Call, the company provided several key metrics and insights into its performance and future guidance. The REIT reported robust leasing activity with over 423,000 square feet leased, achieving renewal spreads 13.8% above expiring rents and new deals at 28.8% above comparable average in-place rent. Same-property net operating income (SPNOI) increased by $5.7 million or 3.6% on a trailing 12-month basis, while maintaining a stable portfolio occupancy rate of 94%. The average in-place rent was $12.77 per square foot, significantly below the market average of $24, indicating potential for future rent increases. The REIT's debt profile remains strong with only $172 million maturing through the end of 2026, representing 12% of its total debt, and a recent refinancing of a 4-property portfolio for $39 million. The management expressed confidence in continued SPNOI growth of 3% to 4% annually, driven by strategic asset acquisition and limited new supply in the market. Additionally, they have locked in a blended weighted average interest rate of 5% until mid-2027, providing visibility on debt costs. The management emphasized the resilience and growth potential in the grocery-anchored real estate sector, supported by low vacancy rates and strong tenant demand.Slate Grocery REIT Financial Statement Overview
Summary
Slate Grocery REIT demonstrates strong revenue growth and effective cost management, resulting in healthy margins. The balance sheet shows a balanced use of leverage, though liabilities require careful monitoring. Cash flow generation is robust, but strategic cash management remains crucial.Income Statement
Slate Grocery REIT has shown consistent revenue growth over the years, with a noticeable increase from 2021 to 2024. The gross profit margin is strong, indicating effective management of costs relative to revenue. However, the net profit margin, while positive, reflects a moderate level of profitability, suggesting room for improvement in controlling other operational expenses. The EBITDA margin is robust, highlighting the company's ability to generate earnings before accounting for interest, taxes, depreciation, and amortization.85
Very Positive
Balance Sheet
The balance sheet of Slate Grocery REIT presents a moderate debt-to-equity ratio, indicative of a balanced leverage strategy. However, the return on equity has shown variability, suggesting fluctuating efficiency in generating profits from shareholders' equity. The equity ratio is relatively stable, signifying a solid capital structure. Nevertheless, the company’s total liabilities are substantial, which could pose risks if not managed properly.70
Positive
Cash Flow
The cash flow statements reveal a positive trend in free cash flow, reflecting the company's capacity to generate cash after capital expenditures. The operating cash flow to net income ratio indicates solid cash conversion, enhancing financial flexibility. However, fluctuations in financing and investing cash flows suggest potential volatility in cash management strategies.78
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 210.85M | 209.13M | 203.28M | 177.49M | 138.28M | 126.13M |
| Gross Profit | 136.66M | 135.40M | 130.47M | 127.41M | 100.86M | 91.50M |
| EBITDA | 133.35M | 128.47M | 86.77M | 140.66M | 104.87M | 77.40M |
| Net Income | 42.61M | 39.67M | 13.60M | 128.80M | 90.87M | 41.26M |
Balance Sheet | ||||||
| Total Assets | 2.24B | 2.23B | 2.24B | 2.27B | 1.74B | 1.32B |
| Cash, Cash Equivalents and Short-Term Investments | 25.60M | 22.67M | 23.59M | 20.39M | 14.04M | 2.36M |
| Total Debt | 1.18B | 1.17B | 1.16B | 1.13B | 937.74M | 726.37M |
| Total Liabilities | 1.40B | 1.38B | 1.37B | 1.34B | 1.11B | 870.84M |
| Stockholders Equity | 666.01M | 673.47M | 687.44M | 740.51M | 619.02M | 452.72M |
Cash Flow | ||||||
| Free Cash Flow | 70.34M | 67.04M | 71.78M | 51.95M | 46.12M | 36.61M |
| Operating Cash Flow | 75.10M | 70.97M | 76.30M | 58.99M | 50.80M | 39.35M |
| Investing Cash Flow | -23.92M | -10.43M | -20.55M | -381.74M | -190.85M | 5.79M |
| Financing Cash Flow | -47.07M | -61.46M | -52.55M | 329.11M | 151.72M | -45.19M |
Slate Grocery REIT Technical Analysis
Positive
14.33
Price Trends
14.13
Positive
14.10
Positive
13.65
Positive
Market Momentum
0.03
Negative
57.19
Neutral
46.20
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SGR.UN, the sentiment is Positive. The current price of 14.33 is above the 20-day moving average (MA) of 14.11, above the 50-day MA of 14.13, and above the 200-day MA of 13.65, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 57.19 is Neutral, neither overbought nor oversold. The STOCH value of 46.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:SGR.UN.
Slate Grocery REIT Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | C$460.50M | 13.30 | 6.45% | 6.69% | 5.14% | 209.83% | |
76 Outperform | C$860.35M | 15.66 | 5.88% | 8.44% | 2.96% | 17.08% | |
68 Neutral | C$982.02M | 10.47 | 4.86% | 4.04% | 3.93% | -29.40% | |
63 Neutral | $7.02B | 13.41 | -0.50% | 6.86% | 4.08% | -25.24% | |
61 Neutral | C$873.09M | 10.74 | 5.58% | 7.89% | -26.40% | ― | |
| ― | $510.44M | ― | -3.37% | 8.03% | ― | ― | |
52 Neutral | C$681.32M | ― | -10.24% | 4.39% | -1.10% | 61.83% |
* Real Estate Sector Average
Performance Comparison
TSE:SGR.UN
Slate Grocery REIT
14.33
2.75
23.75%
TSE:DRM
DREAM Un Cl A
20.60
-4.65
-18.42%
TSE:MRG.UN
Morguard NA REIT UN
18.72
1.15
6.55%
TSE:PLZ.UN
Plaza Retail REIT
4.18
0.68
19.43%
ARESF
Artis Real Estate Investment
5.35
0.19
3.68%
TSE:HOM.UN
BSR Real Estate Investment Trust
17.86
0.43
2.47%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.