INDEPENDENCE REALTY TRUST IN (IRT) Stock Fundamental Analysis
NYSE:IRT - New York Stock Exchange, Inc. - US45378A1060 - REIT - Currency: USD
We assign a fundamental rating of 4 out of 10 to IRT. IRT was compared to 20 industry peers in the Residential REITs industry. While IRT is still in line with the averages on profitability rating, there are concerns on its financial health. IRT is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
IRT had positive earnings in the past year.
In the past year IRT had a positive cash flow from operations.
Of the past 5 years IRT 4 years were profitable.
Each year in the past 5 years IRT had a positive operating cash flow.
1.2 Ratios
The Return On Assets of IRT (0.50%) is comparable to the rest of the industry.
The Return On Equity of IRT (0.87%) is comparable to the rest of the industry.
IRT has a Return On Invested Capital of 1.70%. This is in the lower half of the industry: IRT underperforms 60.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for IRT is in line with the industry average of 2.62%.
The 3 year average ROIC (1.61%) for IRT is below the current ROIC(1.70%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.5% | ||
| ROE | 0.87% | ||
| ROIC | 1.7% |
ROA(3y)0.72%
ROA(5y)0.74%
ROE(3y)1.3%
ROE(5y)1.45%
ROIC(3y)1.61%
ROIC(5y)1.53%
1.3 Margins
IRT has a Profit Margin (4.69%) which is comparable to the rest of the industry.
In the last couple of years the Profit Margin of IRT has declined.
IRT has a Operating Margin (19.58%) which is in line with its industry peers.
IRT's Operating Margin has declined in the last couple of years.
IRT's Gross Margin of 58.62% is in line compared to the rest of the industry. IRT outperforms 50.00% of its industry peers.
In the last couple of years the Gross Margin of IRT has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.58% | ||
| PM (TTM) | 4.69% | ||
| GM | 58.62% |
OM growth 3Y-0.9%
OM growth 5Y-4%
PM growth 3Y-29.9%
PM growth 5Y-22.94%
GM growth 3Y-0.23%
GM growth 5Y0.51%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), IRT is destroying value.
The number of shares outstanding for IRT has been increased compared to 1 year ago.
IRT has more shares outstanding than it did 5 years ago.
The debt/assets ratio for IRT has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.01, we must say that IRT is in the distress zone and has some risk of bankruptcy.
IRT has a Altman-Z score (1.01) which is in line with its industry peers.
The Debt to FCF ratio of IRT is 20.29, which is on the high side as it means it would take IRT, 20.29 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 20.29, IRT is in the better half of the industry, outperforming 70.00% of the companies in the same industry.
A Debt/Equity ratio of 0.64 indicates that IRT is somewhat dependend on debt financing.
With an excellent Debt to Equity ratio value of 0.64, IRT belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 20.29 | ||
| Altman-Z | 1.01 |
ROIC/WACC0.26
WACC6.59%
2.3 Liquidity
A Current Ratio of 0.17 indicates that IRT may have some problems paying its short term obligations.
IRT has a worse Current ratio (0.17) than 65.00% of its industry peers.
IRT has a Quick Ratio of 0.17. This is a bad value and indicates that IRT is not financially healthy enough and could expect problems in meeting its short term obligations.
IRT has a Quick ratio of 0.17. This is in the lower half of the industry: IRT underperforms 65.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.17 | ||
| Quick Ratio | 0.17 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 553.33% over the past year.
Measured over the past years, IRT shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -18.85% on average per year.
The Revenue has decreased by -2.94% in the past year.
The Revenue has been growing by 25.79% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)553.33%
EPS 3Y-22.63%
EPS 5Y-18.85%
EPS Q2Q%-50%
Revenue 1Y (TTM)-2.94%
Revenue growth 3Y36.75%
Revenue growth 5Y25.79%
Sales Q2Q%0.44%
3.2 Future
Based on estimates for the next years, IRT will show a very strong growth in Earnings Per Share. The EPS will grow by 20.51% on average per year.
The Revenue is expected to grow by 5.65% on average over the next years.
EPS Next Y34.14%
EPS Next 2Y28.37%
EPS Next 3Y20.51%
EPS Next 5YN/A
Revenue Next Year4.01%
Revenue Next 2Y5.1%
Revenue Next 3Y4.82%
Revenue Next 5Y5.65%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 127.00, which means the current valuation is very expensive for IRT.
The rest of the industry has a similar Price/Earnings ratio as IRT.
The average S&P500 Price/Earnings ratio is at 27.45. IRT is valued rather expensively when compared to this.
With a Price/Forward Earnings ratio of 61.31, IRT can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of IRT is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of IRT to the average of the S&P500 Index (21.90), we can say IRT is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 127 | ||
| Fwd PE | 61.31 |
4.2 Price Multiples
65.00% of the companies in the same industry are more expensive than IRT, based on the Enterprise Value to EBITDA ratio.
IRT's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. IRT is cheaper than 65.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 37.42 | ||
| EV/EBITDA | 18.06 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates IRT does not grow enough to justify the current Price/Earnings ratio.
A more expensive valuation may be justified as IRT's earnings are expected to grow with 20.51% in the coming years.
PEG (NY)3.72
PEG (5Y)N/A
EPS Next 2Y28.37%
EPS Next 3Y20.51%
5. Dividend
5.1 Amount
IRT has a Yearly Dividend Yield of 3.80%. Purely for dividend investing, there may be better candidates out there.
IRT's Dividend Yield is comparable with the industry average which is at 4.72.
Compared to an average S&P500 Dividend Yield of 2.42, IRT pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.8% |
5.2 History
The dividend of IRT decreases each year by -2.50%.
IRT has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of IRT decreased recently.
Dividend Growth(5Y)-2.5%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
IRT pays out 482.40% of its income as dividend. This is not a sustainable payout ratio.
DP482.4%
EPS Next 2Y28.37%
EPS Next 3Y20.51%
17.78
+0.15 (+0.85%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryResidential REITs
Earnings (Last)
Earnings (Next)
Inst Owners101.82%
Inst Owner Change0.73%
Ins Owners0.49%
Ins Owner Change-2.36%
Market Cap4.16B
Analysts82.22
Price Target22.7 (27.67%)
Short Float %8.01%
Short Ratio9
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.8% |
Yearly Dividend0.63
Dividend Growth(5Y)-2.5%
DP482.4%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-50.24%
Min EPS beat(2)-106.09%
Max EPS beat(2)5.61%
EPS beat(4)1
Avg EPS beat(4)-42.07%
Min EPS beat(4)-106.09%
Max EPS beat(4)5.61%
EPS beat(8)2
Avg EPS beat(8)-237.35%
EPS beat(12)5
Avg EPS beat(12)-169.56%
EPS beat(16)8
Avg EPS beat(16)-114.24%
Revenue beat(2)0
Avg Revenue beat(2)-2.53%
Min Revenue beat(2)-2.58%
Max Revenue beat(2)-2.47%
Revenue beat(4)0
Avg Revenue beat(4)-2.25%
Min Revenue beat(4)-2.91%
Max Revenue beat(4)-1.04%
Revenue beat(8)0
Avg Revenue beat(8)-1.62%
Revenue beat(12)1
Avg Revenue beat(12)-1.33%
Revenue beat(16)5
Avg Revenue beat(16)0.05%
PT rev (1m)0.65%
PT rev (3m)1.33%
EPS NQ rev (1m)-2.78%
EPS NQ rev (3m)-9.92%
EPS NY rev (1m)-2.09%
EPS NY rev (3m)-6.5%
Revenue NQ rev (1m)-0.17%
Revenue NQ rev (3m)-1.41%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.87%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 127 | ||
| Fwd PE | 61.31 | ||
| P/S | 6.49 | ||
| P/FCF | 37.42 | ||
| P/OCF | 15.06 | ||
| P/B | 1.2 | ||
| P/tB | 1.2 | ||
| EV/EBITDA | 18.06 |
EPS(TTM)0.14
EY0.79%
EPS(NY)0.29
Fwd EY1.63%
FCF(TTM)0.48
FCFY2.67%
OCF(TTM)1.18
OCFY6.64%
SpS2.74
BVpS14.78
TBVpS14.77
PEG (NY)3.72
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.5% | ||
| ROE | 0.87% | ||
| ROCE | 2.16% | ||
| ROIC | 1.7% | ||
| ROICexc | 1.71% | ||
| ROICexgc | 1.73% | ||
| OM | 19.58% | ||
| PM (TTM) | 4.69% | ||
| GM | 58.62% | ||
| FCFM | 17.34% |
ROA(3y)0.72%
ROA(5y)0.74%
ROE(3y)1.3%
ROE(5y)1.45%
ROIC(3y)1.61%
ROIC(5y)1.53%
ROICexc(3y)1.61%
ROICexc(5y)1.54%
ROICexgc(3y)1.63%
ROICexgc(5y)1.56%
ROCE(3y)2.04%
ROCE(5y)1.94%
ROICexcg growth 3Y39.04%
ROICexcg growth 5Y-6.61%
ROICexc growth 3Y39.15%
ROICexc growth 5Y-6.73%
OM growth 3Y-0.9%
OM growth 5Y-4%
PM growth 3Y-29.9%
PM growth 5Y-22.94%
GM growth 3Y-0.23%
GM growth 5Y0.51%
F-Score6
Asset Turnover0.11
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 20.29 | ||
| Debt/EBITDA | 6.33 | ||
| Cap/Depr | 73.05% | ||
| Cap/Sales | 25.75% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 78.57% | ||
| Profit Quality | 369.41% | ||
| Current Ratio | 0.17 | ||
| Quick Ratio | 0.17 | ||
| Altman-Z | 1.01 |
F-Score6
WACC6.59%
ROIC/WACC0.26
Cap/Depr(3y)78.04%
Cap/Depr(5y)70.33%
Cap/Sales(3y)27.58%
Cap/Sales(5y)23.5%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)553.33%
EPS 3Y-22.63%
EPS 5Y-18.85%
EPS Q2Q%-50%
EPS Next Y34.14%
EPS Next 2Y28.37%
EPS Next 3Y20.51%
EPS Next 5YN/A
Revenue 1Y (TTM)-2.94%
Revenue growth 3Y36.75%
Revenue growth 5Y25.79%
Sales Q2Q%0.44%
Revenue Next Year4.01%
Revenue Next 2Y5.1%
Revenue Next 3Y4.82%
Revenue Next 5Y5.65%
EBIT growth 1Y-13.28%
EBIT growth 3Y35.52%
EBIT growth 5Y20.76%
EBIT Next Year187.53%
EBIT Next 3Y48.61%
EBIT Next 5Y35.91%
FCF growth 1Y25.8%
FCF growth 3Y108.82%
FCF growth 5Y23.57%
OCF growth 1Y7.92%
OCF growth 3Y70.62%
OCF growth 5Y28.2%