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RioCan Real Estate Investment Trust (TSE:REI.UN)
TSX:REI.UN
RESEARCH TOOLSreports
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RioCan Real Estate Investment
(TSX:REI.UN)
71Outperform
Positive Factors
Debt Management
More than 50% of 2025 debt maturities have already been addressed, with significant repayments and attractive refinancing options.
Financial Performance
Q4 results marked a strong finish to 2024 and provided further evidence of the operating momentum currently embedded within REI's urban retail portfolio.
Negative Factors
Interest Expense
Greater interest expense from refinancing debt maturities at higher interest rates partially offset growth.
RioCan Real Estate Investment (REI.UN) vs. S&P 500 (SPY)
Market Cap
$5.52B
Dividend Yield6.29%
Average Volume (3M)643.38K
Price to Earnings (P/E)11.8
Beta (1Y)0.96
Revenue Growth11.62%
EPS Growth1120.60%
CountryCA
Employees568
SectorReal Estate
Sector Strength69
IndustryREITs
Share Statistics
EPS (TTM)1.57
Shares Outstanding297,200,000
10 Day Avg. Volume640,660
30 Day Avg. Volume643,378
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)N/A
Price to Sales (P/S)4.49
Price to Cash Flow (P/CF)10.50
P/FCF Ratio11.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$21.71Price Target Upside16.99% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
RioCan Real Estate Investment Business Overview & Revenue Model
Company DescriptionRioCan Real Estate Investment Trust engages in owning, development, management, and operation of shopping centers. Its property portfolio includes grocery anchored, new format retail, urban retail, mixed-use and non-grocery anchored centers. The company was founded by Edward Sonshine on July 10, 1981 and is headquartered in Toronto, Canada.
How the Company Makes MoneyRioCan makes money through a diversified revenue model primarily based on rental income from its extensive portfolio of properties. The company leases retail and mixed-use spaces to a wide range of tenants, including major national and international retailers, service providers, and residential tenants. In addition to rental income, RioCan generates revenue through property management fees and development activities, including the construction and sale of residential units in its mixed-use developments. Strategic partnerships and joint ventures with other real estate developers and investors also contribute to its earnings, enabling the company to expand its portfolio and optimize asset performance.
RioCan Real Estate Investment Financial Statement Overview
Summary
RioCan Real Estate Investment shows strong profitability with improved margins and revenue growth. The balance sheet is moderately leveraged, typical for a REIT, but shows a solid equity base. Cash flow generation is improving, yet historical volatility suggests a need for sustained cash management.Income Statement
The company shows a strong gross profit margin of 60.4% TTM, indicating efficient cost management. The net profit margin improved significantly to 37.5% TTM, reflecting enhanced profitability. Revenue growth was robust at 9.1% TTM, signaling positive business expansion. However, EBIT and EBITDA margins have decreased compared to previous years, indicating potential cost pressures.72
Positive
Balance Sheet
The debt-to-equity ratio stands at 0.97, showing moderate leverage typical for REITs. Return on equity is solid at 6.3% TTM, although it could be enhanced further. The equity ratio of 48.8% TTM suggests a balanced capital structure, though high debt levels pose potential risks.68
Positive
Cash Flow
Free cash flow growth is positive at 3722% TTM, although previous years showed volatility. Operating cash flow covers net income by 0.81 times, indicating stable cash generation. The free cash flow to net income ratio improved significantly, yet consistent cash flow generation remains a challenge.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.24B | 1.16B | 1.21B | 1.18B | 1.14B | Gross Profit |
| 740.95M | 748.80M | 700.49M | 689.86M | 670.09M | EBIT |
| 740.95M | 679.19M | 669.30M | 671.31M | 648.15M | EBITDA |
| 731.66M | 237.02M | 674.08M | 675.34M | 652.50M | Net Income Common Stockholders |
| 473.46M | 38.80M | 236.77M | 598.39M | -64.78M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 190.24M | 128.44M | 86.23M | 77.76M | 238.46M | Total Assets |
| 15.47B | 14.84B | 15.10B | 15.18B | 15.27B | Total Debt |
| 7.35B | 6.90B | 6.78B | 6.71B | 6.97B | Net Debt |
| 7.16B | 6.77B | 6.69B | 6.63B | 6.73B | Total Liabilities |
| 7.91B | 7.40B | 7.37B | 7.27B | 7.53B | Stockholders Equity |
| 7.56B | 7.44B | 7.73B | 7.91B | 7.73B |
| Cash Flow | Free Cash Flow | |||
| 81.34M | -5.48M | 113.15M | 26.52M | 35.95M | Operating Cash Flow |
| 378.28M | 385.52M | 506.12M | 490.40M | 552.58M | Investing Cash Flow |
| -360.77M | -200.15M | -79.69M | 94.39M | -469.34M | Financing Cash Flow |
| 48.49M | -147.37M | -417.97M | -745.49M | 61.69M |
RioCan Real Estate Investment Technical Analysis
Negative
18.56
Price Trends
18.63
Negative
18.59
Negative
18.09
Positive
Market Momentum
0.09
Positive
41.58
Neutral
18.41
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:REI.UN, the sentiment is Negative. The current price of 18.56 is below the 20-day moving average (MA) of 19.13, below the 50-day MA of 18.63, and above the 200-day MA of 18.09, indicating a neutral trend. The MACD of 0.09 indicates Positive momentum. The RSI at 41.58 is Neutral, neither overbought nor oversold. The STOCH value of 18.41 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:REI.UN.
RioCan Real Estate Investment Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | C$4.29B | 19.11 | 4.50% | 7.29% | 9.46% | -42.77% | |
71 Outperform | $5.52B | 11.77 | 6.34% | 6.29% | 11.62% | 1120.60% | |
71 Outperform | C$6.55B | 23.91 | 3.20% | 3.65% | 4.45% | ― | |
69 Neutral | C$2.60B | ― | -0.22% | 6.31% | 8.82% | 92.79% | |
61 Neutral | $4.74B | 19.16 | -3.00% | 7.93% | 6.45% | -20.78% | |
59 Neutral | C$2.61B | ― | -2.29% | 5.98% | -6.92% | -310.05% |
* Real Estate Sector Average
Performance Comparison
TSE:REI.UN
RioCan Real Estate Investment
18.56
1.60
9.46%
TSE:CAR.UN
Canadian Apartment
40.92
-5.98
-12.75%
TSE:CRR.UN
Crombie Real Estate ate
14.13
0.98
7.45%
TSE:HR.UN
H&R Real Estate ate Staple
9.95
1.75
21.34%
TSE:SRU.UN
SmartCentres Real Estate Investment Trust
25.18
3.82
17.88%
ARESF
Artis Real Estate Investment
5.26
1.14
27.67%
RioCan Real Estate Investment Earnings Call Summary
Earnings Call Date: Feb 18, 2025 | % Change Since: -1.20% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Positive
RioCan demonstrated strong operational and financial performance in 2024 with record-breaking results, strategic growth, and positive leasing spreads. While there are challenges in the condo market and interest expenses, the trust's strong leasing activity and market position reflect a positive outlook for 2025.Highlights
Record-Breaking Operational Results
RioCan achieved record operational results in 2024, with committed retail occupancy of 98.7% and a blended leasing spread of 18.7% for the year. They finalized approximately 4.8 million square feet of leases, including 1.5 million square feet of new leases.
Strong Financial Metrics
FFO adjusted per unit was $1.81, despite $7.9 million of restructuring costs. They maintained a payout ratio around 60% and increased annual distributions by 4.3%.
ESG and Employee Engagement
Received an ESG rating upgrade to AA from MSCI and recorded top decile performance for employee engagement for the third consecutive year.
RioCan Living Achievements
RioCan Living assets valued over $930 million, with residential rental operations delivering 5.1% same-property NOI growth in 2024.
Strong Leasing and Market Position
Achieved low to mid-teen blended leasing spreads, with high confidence in maintaining strong SPNOI growth supported by contractual rent increases and full-year in-place occupancy effects in 2025.
Lowlights
Challenges in the Condo Market
Concerns about the strained condo market, but 98% of the 372 expected fourth quarter interim occupancies were completed. RioCan expects $530 million of sales revenue from ongoing projects, with $430 million already presold.
Interest Expense Impact
Interest expense net of interest income had an impact of $0.10 on FFO per unit in 2024, with expected average interest rates for 2025 financing activities around 5%.
Tenant Churn
Commercial same property NOI growth was lower than the long-term target of 3% due to temporary tenant churn earlier in the year, although this metric recovered to 3.5% in Q4 2024.
Company Guidance
During the RioCan Real Estate Investment Trust Fourth Quarter 2024 conference call, CEO Jonathan Gitlin outlined the Trust's strong performance and strategic achievements. Key metrics included a committed retail occupancy rate of 98.7% and a blended leasing spread of 18.7%, with approximately 4.8 million square feet of leases finalized, and new leases averaging $26.17 per square foot, 17% above the Trust's average net rent. The Trust's net debt to EBITDA was reduced to within the target range of 8 to 9x. RioCan also achieved an ESG rating upgrade to AA from MSCI and reported 5.1% same-property NOI growth for its residential rental operations. The Trust announced a 4.3% increase in distribution payout, with 2025 FFO expected to range between $1.89 and $1.92, and commercial same-property NOI growth projected at approximately 3.5%. The call highlighted RioCan's strategic leasing activities, high occupancy levels, and strong tenant mix, positioning it well for sustained growth despite potential economic uncertainties.RioCan Real Estate Investment Corporate Events
DividendsFinancial Disclosures
RioCan Reports Robust 2024 Financial Results and Distribution Increase
Positive
Feb 19, 2025
RioCan Real Estate Investment Trust reported strong financial results for the fourth quarter and year-end 2024, highlighted by a 4.3% increase in monthly distribution per unit. The company achieved record occupancy rates and leasing spreads, and saw improved financial metrics such as Adjusted Debt to Adjusted EBITDA. The positive results were driven by strong operational performance and strategic capital management, positioning RioCan well to benefit from favorable market conditions.
Private Placements and FinancingBusiness Operations and Strategy
RioCan Completes $550 Million Debenture Issuance to Strengthen Financial Position
Positive
Feb 12, 2025
RioCan Real Estate Investment Trust has successfully completed a $550 million issuance of senior unsecured debentures in two series, Series AN and Series AO. The proceeds from this issuance will be used to repay existing debts and for general business purposes, with the debentures receiving a credit rating of BBB with a stable trend, indicating a solid financial standing for the Trust.
Private Placements and FinancingBusiness Operations and Strategy
RioCan Announces $550 Million Debenture Offering for Debt Repayment
Neutral
Jan 21, 2025
RioCan Real Estate Investment Trust has announced the issuance of $550 million in senior unsecured debentures, divided into two series: Series AN and Series AO. The funds raised will be primarily used to repay existing debt, with any remaining proceeds allocated for general business purposes. The offering is expected to close on February 12, 2025, and is subject to customary closing conditions, including a stable rating from Morningstar DBRS. This move aims to strengthen RioCan’s financial position by refinancing its debt while maintaining its operational strategy.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.