Spirit Realty Capital Inc (SRC) Stock Fundamental Analysis

USA • New York Stock Exchange • NYSE:SRC • US84860W3007

42.31 USD
-0.67 (-1.56%)
At close: Jan 22, 2024
42.31 USD
0 (0%)
After Hours: 1/22/2024, 8:08:28 PM
Fundamental Rating

4

Taking everything into account, SRC scores 4 out of 10 in our fundamental rating. SRC was compared to 124 industry peers in the Diversified REITs industry. While SRC has a great profitability rating, there are quite some concerns on its financial health. While showing a medium growth rate, SRC is valued expensive at the moment.


Dividend Valuation Growth Profitability Health

7

1. Profitability

1.1 Basic Checks

  • SRC had positive earnings in the past year.
  • SRC had a positive operating cash flow in the past year.
SRC Yearly Net Income VS EBIT VS OCF VS FCFSRC Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 0 -500M -1B

1.2 Ratios

  • The Return On Assets of SRC (2.87%) is better than 74.40% of its industry peers.
  • SRC's Return On Equity of 5.52% is fine compared to the rest of the industry. SRC outperforms 76.00% of its industry peers.
  • SRC's Return On Invested Capital of 3.14% is fine compared to the rest of the industry. SRC outperforms 63.20% of its industry peers.
  • The Average Return On Invested Capital over the past 3 years for SRC is in line with the industry average of 3.05%.
  • The 3 year average ROIC (2.96%) for SRC is below the current ROIC(3.14%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 2.87%
ROE 5.52%
ROIC 3.14%
ROA(3y)1.89%
ROA(5y)2.17%
ROE(3y)3.49%
ROE(5y)3.92%
ROIC(3y)2.96%
ROIC(5y)3.19%
SRC Yearly ROA, ROE, ROICSRC Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2 4 6

1.3 Margins

  • SRC has a Profit Margin of 32.87%. This is amongst the best in the industry. SRC outperforms 87.20% of its industry peers.
  • In the last couple of years the Profit Margin of SRC has grown nicely.
  • With an excellent Operating Margin value of 44.35%, SRC belongs to the best of the industry, outperforming 88.80% of the companies in the same industry.
  • In the last couple of years the Operating Margin of SRC has grown nicely.
  • The Gross Margin of SRC (95.85%) is better than 96.00% of its industry peers.
  • In the last couple of years the Gross Margin of SRC has remained more or less at the same level.
Industry RankSector Rank
OM 44.35%
PM (TTM) 32.87%
GM 95.85%
OM growth 3Y-3.89%
OM growth 5Y2.83%
PM growth 3Y6.81%
PM growth 5Y17.76%
GM growth 3Y-0.21%
GM growth 5Y0.51%
SRC Yearly Profit, Operating, Gross MarginsSRC Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 20 40 60 80

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1

2. Health

2.1 Basic Checks

  • SRC has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
  • The number of shares outstanding for SRC has been increased compared to 1 year ago.
  • SRC has a worse debt/assets ratio than last year.
SRC Yearly Shares OutstandingSRC Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 50M 100M
SRC Yearly Total Debt VS Total AssetsSRC Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2B 4B 6B 8B

2.2 Solvency

  • Based on the Altman-Z score of 0.58, we must say that SRC is in the distress zone and has some risk of bankruptcy.
  • Looking at the Altman-Z score, with a value of 0.58, SRC is in line with its industry, outperforming 49.60% of the companies in the same industry.
  • SRC has a Debt/Equity ratio of 0.85. This is a neutral value indicating SRC is somewhat dependend on debt financing.
  • SRC has a Debt to Equity ratio of 0.85. This is in the better half of the industry: SRC outperforms 64.00% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.85
Debt/FCF N/A
Altman-Z 0.58
ROIC/WACC0.45
WACC6.93%
SRC Yearly LT Debt VS Equity VS FCFSRC Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 0 1B -1B 2B 3B 4B

2.3 Liquidity

  • SRC has a Current Ratio of 0.61. This is a bad value and indicates that SRC is not financially healthy enough and could expect problems in meeting its short term obligations.
  • Looking at the Current ratio, with a value of 0.61, SRC is doing worse than 77.60% of the companies in the same industry.
  • SRC has a Quick Ratio of 0.61. This is a bad value and indicates that SRC is not financially healthy enough and could expect problems in meeting its short term obligations.
  • SRC's Quick ratio of 0.58 is on the low side compared to the rest of the industry. SRC is outperformed by 77.60% of its industry peers.
Industry RankSector Rank
Current Ratio 0.61
Quick Ratio 0.58
SRC Yearly Current Assets VS Current LiabilitesSRC Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 50M 100M 150M 200M

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4

3. Growth

3.1 Past

  • The earnings per share for SRC have decreased by -7.41% in the last year.
  • The Earnings Per Share has been growing by 20.59% on average over the past years. This is a very strong growth
  • SRC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.57%.
  • The Revenue has been growing by 10.47% on average over the past years. This is quite good.
EPS 1Y (TTM)-7.41%
EPS 3Y1%
EPS 5Y20.59%
EPS Q2Q%-53.7%
Revenue 1Y (TTM)10.57%
Revenue growth 3Y11.18%
Revenue growth 5Y10.47%
Sales Q2Q%5.74%

3.2 Future

  • Based on estimates for the next years, SRC will show a decrease in Earnings Per Share. The EPS will decrease by -7.61% on average per year.
  • SRC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.45% yearly.
EPS Next Y-16.82%
EPS Next 2Y-17.44%
EPS Next 3Y-10.67%
EPS Next 5Y-7.61%
Revenue Next Year7.73%
Revenue Next 2Y5.01%
Revenue Next 3Y4.5%
Revenue Next 5Y6.45%

3.3 Evolution

  • The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
  • When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
SRC Yearly Revenue VS EstimatesSRC Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 200M 400M 600M 800M 1B
SRC Yearly EPS VS EstimatesSRC Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 0.5 1 1.5 2

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2

4. Valuation

4.1 Price/Earnings Ratio

  • SRC is valuated rather expensively with a Price/Earnings ratio of 24.18.
  • Based on the Price/Earnings ratio, SRC is valued a bit cheaper than 70.40% of the companies in the same industry.
  • When comparing the Price/Earnings ratio of SRC to the average of the S&P500 Index (28.30), we can say SRC is valued inline with the index average.
  • With a Price/Forward Earnings ratio of 30.43, SRC can be considered very expensive at the moment.
  • Compared to the rest of the industry, the Price/Forward Earnings ratio of SRC indicates a somewhat cheap valuation: SRC is cheaper than 76.00% of the companies listed in the same industry.
  • SRC's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.57.
Industry RankSector Rank
PE 24.18
Fwd PE 30.43
SRC Price Earnings VS Forward Price EarningsSRC Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

  • SRC's Enterprise Value to EBITDA ratio is in line with the industry average.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 14.94
SRC Per share dataSRC EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 10 20 30

4.3 Compensation for Growth

  • SRC has a very decent profitability rating, which may justify a higher PE ratio.
  • A cheap valuation may be justified as SRC's earnings are expected to decrease with -10.67% in the coming years.
PEG (NY)N/A
PEG (5Y)1.17
EPS Next 2Y-17.44%
EPS Next 3Y-10.67%

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5

5. Dividend

5.1 Amount

  • SRC has a Yearly Dividend Yield of 6.33%, which is a nice return.
  • SRC's Dividend Yield is a higher than the industry average which is at 6.82.
  • SRC's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
Industry RankSector Rank
Dividend Yield 6.33%

5.2 History

  • The dividend of SRC decreases each year by -6.14%.
  • SRC has been paying a dividend for at least 10 years, so it has a reliable track record.
  • The dividend of SRC decreased recently.
Dividend Growth(5Y)-6.14%
Div Incr Years1
Div Non Decr Years1
SRC Yearly Dividends per shareSRC Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 1 2 3

5.3 Sustainability

  • 154.84% of the earnings are spent on dividend by SRC. This is not a sustainable payout ratio.
  • The Dividend Rate of SRC has been decling, while earnings will also be declining. This means the current dividend is most likely not sustainable.
DP154.84%
EPS Next 2Y-17.44%
EPS Next 3Y-10.67%
SRC Yearly Income VS Free CF VS DividendSRC Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 0 200M -200M -400M -600M -800M -1B
SRC Dividend Payout.SRC Dividend Payout, showing the Payout Ratio.SRC Dividend Payout.PayoutRetained Earnings

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Spirit Realty Capital Inc / SRC FAQ

Can you provide the ChartMill fundamental rating for Spirit Realty Capital Inc?

ChartMill assigns a fundamental rating of 4 / 10 to SRC.


What is the valuation status of Spirit Realty Capital Inc (SRC) stock?

ChartMill assigns a valuation rating of 2 / 10 to Spirit Realty Capital Inc (SRC). This can be considered as Overvalued.


What is the profitability of SRC stock?

Spirit Realty Capital Inc (SRC) has a profitability rating of 8 / 10.


Can you provide the financial health for SRC stock?

The financial health rating of Spirit Realty Capital Inc (SRC) is 1 / 10.


What is the earnings growth outlook for Spirit Realty Capital Inc?

The Earnings per Share (EPS) of Spirit Realty Capital Inc (SRC) is expected to decline by -16.82% in the next year.