SmartCentres Real Estate Investment Trust (SRU.UN) AI Stock Analysis

• Market Cap: C$4.29B
• Dividend Yield: 7.35%
• Average Volume (3M): 356.42K
• Price to Earnings (P/E): 18.9
• Beta (1Y): 0.87
• Revenue Growth: 9.46%
• EPS Growth: -42.77%
• Country: CA
• Employees: 342
• Sector: Real Estate
• Sector Strength: 77
• Industry: REIT - Retail
• EPS (TTM): 1.33
• Shares Outstanding: 144,687,640
• 10 Day Avg. Volume: 398,318
• 30 Day Avg. Volume: 356,424
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 4.88
• Price to Cash Flow (P/CF): 4.90
• P/FCF Ratio: 3.80
• 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$27.50
• Price Target Upside: 9.30% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

SmartCentres REIT demonstrates solid cash flow, a stable financial position, and positive market momentum. The technical indicators and valuation metrics are favorable, and the recent earnings call reflects strong operational performance. Despite some concerns about profitability and interest expenses, the company's strengths in rental growth and occupancy support a positive outlook.

SmartCentres Real Estate Investment Trust Business Overview & Revenue Model

Company Description

SmartCentres Real Estate Investment Trust is one of Canada's largest fully integrated REITs, with a best-in-class portfolio featuring 166 strategically located properties in communities across the country. SmartCentres has approximately $10.4 billion in assets and owns 33.8 million square feet of income producing value-oriented retail space with 97.4% occupancy, on 3,500 acres of owned land across Canada. SmartCentres continues to focus on enhancing the lives of Canadians by planning and developing complete, connected, mixed-use communities on its existing retail properties. A publicly announced $11.9 billion intensification program ($5.4 billion at SmartCentres' share) represents the REIT's current major development focus on which construction is expected to commence within the next five years. This intensification program consists of rental apartments, condos, seniors' residences and hotels, to be developed under the SmartLiving banner, and retail, office, and storage facilities, to be developed under the SmartCentres banner. SmartCentres' intensification program is expected to produce an additional 59.3 million square feet (27.9 million square feet at SmartCentres' share) of space, 27.1 million square feet (12.3 million square feet at SmartCentres' share) of which has or will commence construction within next five years. From shopping centres to city centres, SmartCentres is uniquely positioned to reshape the Canadian urban and urban-suburban landscape. Included in this intensification program is the Trust's share of SmartVMC which, when completed, is expected to include approximately 11.0 million square feet of mixed-use space in Vaughan, Ontario. Construction of the first five sold-out phases of Transit City Condominiums that represent 2,789 residential units continues to progress. Final closings of the first two phases of Transit City Condominiums began ahead of budget and ahead of schedule in August 2020 and as at September 30, 2020, 766 units (representing approximately 70% of all 1,110 units in the first and second phases) had closed with the balance of units expected to close before year end. In addition, the presold 631 units in the third phase along with 22 townhomes, all of which are sold out and currently under construction, are expected to close in 2021. The fourth and fifth sold-out phases representing 1,026 units are currently under construction and are expected to close in 2023.

How the Company Makes Money

SmartCentres REIT makes money primarily through leasing space in its retail and mixed-use properties to tenants. Key revenue streams include rental income from long-term leases with major retailers, which provide a stable and predictable cash flow. Additionally, the company generates income from property management fees and development activities, such as constructing new commercial and residential projects. Strategic partnerships with large retail chains and real estate development firms also significantly contribute to its earnings by facilitating the creation of high-demand commercial spaces and residential units.

SmartCentres Real Estate Investment Trust Financial Statement Overview

Summary

SmartCentres REIT shows strong cash flow and a stable financial position, but faces challenges with profitability and revenue growth. The company's manageable leverage and solid cash flow allow it to manage debt and invest in growth, although decreasing ROE impacts overall returns.

Income Statement

The company has shown a consistent revenue base with fluctuations in profitability. The gross profit margin improved to 59.6% in 2024, up from 56.1% in 2023. Net profit margins have been volatile, with a decrease to 25.8% in 2024 from 44.5% in 2023. Revenue growth has been negative recently, declining by 1.2% from 2023 to 2024, indicating some challenges in maintaining growth.

Balance Sheet

The balance sheet reflects a stable financial structure with a debt-to-equity ratio of 0.96 in 2024, slightly higher than 0.95 in 2023, suggesting a moderate level of leverage. The equity ratio remained stable at around 43.9% in 2024. Return on equity dropped to 4.5% in 2024 from 7.8% in 2023, indicating reduced profitability for shareholders.

Cash Flow

Cash flow generation remains strong, with operating cash flow covering net income comfortably, evident from an operating cash flow to net income ratio of 1.58 in 2024. Free cash flow growth rate was 13.6% in 2024, showing robust cash generation capabilities. The free cash flow to net income ratio stands at 1.58, indicating efficient cash utilization.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
918.36M	929.40M	804.60M	780.76M	781.25M
	Gross Profit
547.51M	608.38M	521.16M	501.24M	474.66M
	EBIT
0.00	577.57M	488.42M	674.38M	505.97M
	EBITDA
478.63M	681.02M	498.73M	686.84M	520.44M
	Net Income Common Stockholders
236.75M	413.70M	811.11M	475.28M	-143.46M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
37.69M	34.74M	35.26M	62.23M	794.59M
	Total Assets
11.94B	11.91B	11.70B	11.29B	10.72B
	Total Debt
5.05B	5.00B	4.98B	4.85B	5.21B
	Net Debt
5.01B	4.96B	4.95B	4.79B	4.42B
	Total Liabilities
5.60B	5.55B	5.54B	5.45B	5.56B
	Stockholders Equity
5.24B	5.27B	5.13B	4.88B	4.32B
Cash Flow		Free Cash Flow
373.66M	328.95M	369.17M	371.27M	428.94M
	Operating Cash Flow
374.21M	330.85M	370.76M	371.62M	295.98M
	Investing Cash Flow
-155.53M	1.52M	-121.39M	-413.17M	-157.38M
	Financing Cash Flow
-215.73M	-332.89M	-276.35M	-690.81M	600.62M

SmartCentres Real Estate Investment Trust Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 25.16
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SRU.UN, the sentiment is Positive. The current price of 25.16 is above the 20-day moving average (MA) of 24.86, above the 50-day MA of 25.07, and above the 200-day MA of 24.41, indicating a bullish trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 53.41 is Neutral, neither overbought nor oversold. The STOCH value of 88.07 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:SRU.UN.

SmartCentres Real Estate Investment Trust Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SRU.UN	76 Outperform	C$4.29B	18.94	4.50%	7.35%	9.46%	-42.77%
FCR.UN	72 Outperform	C$3.49B	17.01	5.20%	5.30%	6.55%	―
Sector *	59 Neutral	$2.72B	11.53	0.09%	8679.99%	5.56%	-16.50%
HR.UN	56 Neutral	C$2.54B	―	-2.29%	6.32%	-6.92%	-296.31%