AGREE REALTY CORP (ADC) Stock Fundamental Analysis
NYSE:ADC - New York Stock Exchange, Inc. - US0084921008 - REIT - Currency: USD
We assign a fundamental rating of 4 out of 10 to ADC. ADC was compared to 129 industry peers in the Diversified REITs industry. While ADC has a great profitability rating, there are quite some concerns on its financial health. ADC is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year ADC was profitable.
ADC had a positive operating cash flow in the past year.
ADC had positive earnings in each of the past 5 years.
ADC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of ADC (2.14%) is better than 70.54% of its industry peers.
The Return On Equity of ADC (3.29%) is better than 63.57% of its industry peers.
ADC's Return On Invested Capital of 2.82% is in line compared to the rest of the industry. ADC outperforms 54.26% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ADC is in line with the industry average of 3.17%.
The last Return On Invested Capital (2.82%) for ADC is above the 3 year average (2.69%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.14% | ||
| ROE | 3.29% | ||
| ROIC | 2.82% |
ROA(3y)2.13%
ROA(5y)2.2%
ROE(3y)3.18%
ROE(5y)3.33%
ROIC(3y)2.69%
ROIC(5y)2.7%
1.3 Margins
The Profit Margin of ADC (29.38%) is better than 85.27% of its industry peers.
In the last couple of years the Profit Margin of ADC has declined.
Looking at the Operating Margin, with a value of 48.29%, ADC belongs to the top of the industry, outperforming 89.92% of the companies in the same industry.
ADC's Operating Margin has declined in the last couple of years.
The Gross Margin of ADC (88.13%) is better than 89.92% of its industry peers.
ADC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 48.29% | ||
| PM (TTM) | 29.38% | ||
| GM | 88.13% |
OM growth 3Y-2.54%
OM growth 5Y-2.49%
PM growth 3Y-5.95%
PM growth 5Y-7.12%
GM growth 3Y-0.09%
GM growth 5Y0.01%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ADC is destroying value.
The number of shares outstanding for ADC has been increased compared to 1 year ago.
ADC has more shares outstanding than it did 5 years ago.
ADC has a worse debt/assets ratio than last year.
2.2 Solvency
ADC has an Altman-Z score of 1.75. This is a bad value and indicates that ADC is not financially healthy and even has some risk of bankruptcy.
With an excellent Altman-Z score value of 1.75, ADC belongs to the best of the industry, outperforming 93.02% of the companies in the same industry.
ADC has a Debt/Equity ratio of 0.51. This is a neutral value indicating ADC is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.51, ADC belongs to the top of the industry, outperforming 88.37% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.51 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.75 |
ROIC/WACC0.37
WACC7.7%
2.3 Liquidity
ADC has a Current Ratio of 0.80. This is a bad value and indicates that ADC is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of ADC (0.80) is worse than 62.79% of its industry peers.
ADC has a Quick Ratio of 0.80. This is a bad value and indicates that ADC is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of ADC (0.80) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 12.35% over the past year.
ADC shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -1.17% yearly.
ADC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.82%.
ADC shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 26.90% yearly.
EPS 1Y (TTM)12.35%
EPS 3Y-2.44%
EPS 5Y-1.17%
EPS Q2Q%0%
Revenue 1Y (TTM)14.82%
Revenue growth 3Y22.06%
Revenue growth 5Y26.9%
Sales Q2Q%11.49%
3.2 Future
The Earnings Per Share is expected to grow by 3.88% on average over the next years.
Based on estimates for the next years, ADC will show a quite strong growth in Revenue. The Revenue will grow by 13.62% on average per year.
EPS Next Y1.49%
EPS Next 2Y3.83%
EPS Next 3Y1.51%
EPS Next 5Y3.88%
Revenue Next Year11.09%
Revenue Next 2Y10.99%
Revenue Next 3Y14.6%
Revenue Next 5Y13.62%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 41.77, the valuation of ADC can be described as expensive.
ADC's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 29.35, ADC is valued a bit more expensive.
The Price/Forward Earnings ratio is 41.16, which means the current valuation is very expensive for ADC.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ADC indicates a somewhat cheap valuation: ADC is cheaper than 69.77% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.10. ADC is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.77 | ||
| Fwd PE | 41.16 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ADC is valued more expensive than 87.60% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 21.65 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of ADC may justify a higher PE ratio.
PEG (NY)28.12
PEG (5Y)N/A
EPS Next 2Y3.83%
EPS Next 3Y1.51%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.05%, ADC is a good candidate for dividend investing.
ADC's Dividend Yield is slightly below the industry average, which is at 19.22.
Compared to an average S&P500 Dividend Yield of 2.33, ADC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.05% |
5.2 History
The dividend of ADC is nicely growing with an annual growth rate of 6.62%!
ADC has paid a dividend for at least 10 years, which is a reliable track record.
ADC has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)6.62%
Div Incr Years11
Div Non Decr Years12
5.3 Sustainability
ADC pays out 171.58% of its income as dividend. This is not a sustainable payout ratio.
The dividend of ADC is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP171.58%
EPS Next 2Y3.83%
EPS Next 3Y1.51%
76.02
+1.08 (+1.44%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryDiversified REITs
Earnings (Last)
Earnings (Next)
Inst Owners112%
Inst Owner Change3.36%
Ins Owners1.29%
Ins Owner Change5.99%
Market Cap8.15B
Analysts80.8
Price Target81.19 (6.8%)
Short Float %12.13%
Short Ratio12.94
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.05% |
Yearly Dividend2.99
Dividend Growth(5Y)6.62%
DP171.58%
Div Incr Years11
Div Non Decr Years12
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-4.6%
Min EPS beat(2)-5.6%
Max EPS beat(2)-3.61%
EPS beat(4)2
Avg EPS beat(4)2.94%
Min EPS beat(4)-5.6%
Max EPS beat(4)16.63%
EPS beat(8)2
Avg EPS beat(8)-2.56%
EPS beat(12)5
Avg EPS beat(12)-0.77%
EPS beat(16)8
Avg EPS beat(16)0.69%
Revenue beat(2)2
Avg Revenue beat(2)1.55%
Min Revenue beat(2)1.32%
Max Revenue beat(2)1.78%
Revenue beat(4)4
Avg Revenue beat(4)1.57%
Min Revenue beat(4)1.03%
Max Revenue beat(4)2.17%
Revenue beat(8)8
Avg Revenue beat(8)1.86%
Revenue beat(12)11
Avg Revenue beat(12)1.44%
Revenue beat(16)12
Avg Revenue beat(16)1%
PT rev (1m)-0.44%
PT rev (3m)0.16%
EPS NQ rev (1m)-2.08%
EPS NQ rev (3m)-1.2%
EPS NY rev (1m)-1.08%
EPS NY rev (3m)-0.41%
Revenue NQ rev (1m)0.82%
Revenue NQ rev (3m)3.18%
Revenue NY rev (1m)1.08%
Revenue NY rev (3m)3.09%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.77 | ||
| Fwd PE | 41.16 | ||
| P/S | 13.21 | ||
| P/FCF | N/A | ||
| P/OCF | 18.87 | ||
| P/B | 1.48 | ||
| P/tB | 1.76 | ||
| EV/EBITDA | 21.65 |
EPS(TTM)1.82
EY2.39%
EPS(NY)1.85
Fwd EY2.43%
FCF(TTM)-5.08
FCFYN/A
OCF(TTM)4.03
OCFY5.3%
SpS5.75
BVpS51.38
TBVpS43.31
PEG (NY)28.12
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.14% | ||
| ROE | 3.29% | ||
| ROCE | 3.57% | ||
| ROIC | 2.82% | ||
| ROICexc | 2.82% | ||
| ROICexgc | 3.17% | ||
| OM | 48.29% | ||
| PM (TTM) | 29.38% | ||
| GM | 88.13% | ||
| FCFM | N/A |
ROA(3y)2.13%
ROA(5y)2.2%
ROE(3y)3.18%
ROE(5y)3.33%
ROIC(3y)2.69%
ROIC(5y)2.7%
ROICexc(3y)2.69%
ROICexc(5y)2.7%
ROICexgc(3y)3.04%
ROICexgc(5y)3.08%
ROCE(3y)3.4%
ROCE(5y)3.41%
ROICexcg growth 3Y-0.04%
ROICexcg growth 5Y-2.84%
ROICexc growth 3Y1%
ROICexc growth 5Y-2.17%
OM growth 3Y-2.54%
OM growth 5Y-2.49%
PM growth 3Y-5.95%
PM growth 5Y-7.12%
GM growth 3Y-0.09%
GM growth 5Y0.01%
F-Score7
Asset Turnover0.07
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.51 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 5.52 | ||
| Cap/Depr | 472.17% | ||
| Cap/Sales | 158.38% | ||
| Interest Coverage | 2.41 | ||
| Cash Conversion | 85.54% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.8 | ||
| Altman-Z | 1.75 |
F-Score7
WACC7.7%
ROIC/WACC0.37
Cap/Depr(3y)815.29%
Cap/Depr(5y)1193.64%
Cap/Sales(3y)261.47%
Cap/Sales(5y)350.2%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)12.35%
EPS 3Y-2.44%
EPS 5Y-1.17%
EPS Q2Q%0%
EPS Next Y1.49%
EPS Next 2Y3.83%
EPS Next 3Y1.51%
EPS Next 5Y3.88%
Revenue 1Y (TTM)14.82%
Revenue growth 3Y22.06%
Revenue growth 5Y26.9%
Sales Q2Q%11.49%
Revenue Next Year11.09%
Revenue Next 2Y10.99%
Revenue Next 3Y14.6%
Revenue Next 5Y13.62%
EBIT growth 1Y14.76%
EBIT growth 3Y18.97%
EBIT growth 5Y23.75%
EBIT Next Year96.11%
EBIT Next 3Y-25.99%
EBIT Next 5YN/A
FCF growth 1Y39.19%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y10.31%
OCF growth 3Y20.6%
OCF growth 5Y27.8%