Monmouth Real Estate Investment Corp MNR 0.84%
Analysts are predicting about 10 percent earnings growth over the next two years. They see very little opportunity for internal earnings growth, and their 10 percent growth estimate assumes that the company will execute its acquisition strategy.
DA Davidson set a Neutral rating on the REIT and a price target of $12
http://www.benzinga.com/analyst-ratings/analyst-color/15/04/5398336/6-reits-da-davidson-is-watching?utm_campaign=partner_feed&utm_source=marketwatch.com&utm_medium=partner_feed&utm_content=analyst_ratings_page
Monmouth R.E. Inv. Corp. Coverage Initiated at National Securities (MNR)
Research analysts at
National Securities started coverage on shares of
Monmouth R.E. Inv. Corp. (NYSE:MNR) in a report released on Monday,
MarketBeat Ratings reports. The firm set a “neutral” rating and a $10.00
price targeton the real estate investment trust’s stock.
National Securities‘s price target would suggest a potential upside of 2.04% from the company’s current price.
The analysts wrote, “Investment Conclusion . We are initiating coverage of Monmouth Real Estate
Investment Corporation with a Neutral rating and $10.00 price target. Having 43% of
your portfolio leased to a single tenant, a $47bln market cap company facing constant
pressure from shareholders to improve profitability and whose fortunes are tied to
commodity pricing and the American consumer, leaves much to be desired relative to
peers. Though such a tenant all but ensures recurring revenue and a certain level of
occupancy, it also constricts the ability of the operator to ratchet rents and drive FFO. As
such, despite one of the lowest betas in the space and a consistent history of paying
dividends, a dividend that has not been raised since 2006 we note, we feel a cautious
Neutral rating is warranted given the dearth of prospects related to FFO growth and
subsequently MNR’s ability to increase their dividend per share. Our $10.00 price target
is derived from an average of our net-asset-value (“NAV”), price to funds from
operations (“P/FFO”), and dividend discount model (“DDM”) valuations. Our $10.00 price
target implies an annual total return, including the current 6.15% dividend yield, of 8.7% at MNR’s $9.75 7/24/15 closing price.”
OVERVIEW OF METRICS
http://www.zacks.com/stock/research/snapshot/MNR.pdf
Any idea when we shareholders can expect more than a 60 cent dividend?
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- 1 Reply to ilovesilversilver
The acquisitions are all returning a yield higher than the current dividend yield based upon their last conference call but right now that's just closing the gap between FFO and the existing dividend which they hope to fully cover with FFO excluding investment gains shortly. I wouldn't expect a dividend increase anytime in the next few years nor would a prudent shareholder want one as any excess funds that aren't required to be distributed could better be used to retire preferred stock on which they are paying 7-8%.
Less
When satan laces up his ice skates....? Nothing wrong with current yield especially sitting near its 52 wk low as it is now providing a good entry perhaps.
GLTA
- 1 Reply to sumrtym7
Considering the fact that no government bond will see 6% for the foreseeable future, MNR dividends are doin' just fine for me.
Feb. 24, 2015
$11.38 on the daynow $9.82
reduction of -14%
Conclusion
Monmouth's financials are not spectacular. They are solid, but a conservative investor usually wants to see a better moat for the dividend. The company's revenue growth is encouraging, but AFFO is lagging in part because of share dilution. The company's reliance on one tenant for roughly half of its income also could be a concern for many conservative income investors.
The lure of participating in the growth of e-commerce, though, is strong. The experts believe that e-commerce (and m-commerce) are here to stay and are going to increase in impact. Monmouth is a bet on that trend, and some would say a bet on the future. The nice thing about the stock is that the dividend makes the wait for those underlying trends to develop (assuming that they do) bearable.
It is important not to get starry-eyed about any investment. Great concepts can take many long years to produce concrete investment results. We all want a piece of future -- but at the right price. Any REIT that is not easily covering the dividend with AFFO has a major question mark next to it.
By traditional measures, Monmouth is not a bargain at present levels, and bargains are what we are after. Depending upon how aggressive an interested trader is, they may want to wait for a pullback before taking a position. A few technical levels to consider as entry points would be the 200-day moving average, which sits around $10.50, or the nearby 50% Fibonacci Retracement level at $10.36. A patient investor might even see single digits again. In any event, being patient at current levels may get you a better value for a piece of a company with good prospects for a bright future.
Overall, the Morningstar figures suggest a reasonably valued stock that is neither a bargain nor particularly overvalued. They confirm what we found above, that the company's strength is revenue growth, but its net income is lagging. The beta is 0.58, so this stock does is about half as volatile as the overall market.
Moving on, analysts are neutral on the stock, with a consensus price target of $11.50.
http://seekingalpha.com/article/2943366-monmouth-real-estate-investment-a-growing-play-on-e-commerce
Monmouth Is A Great Dividend Payer, Not So Much A Great Dividend Grower
3/8/2015
Very nice overview.
MNR has underperformed other REITs over time.
http://seekingalpha.com/article/3389035-monmouth-is-a-great-dividend-payer-not-so-much-a-great-dividend-grower
Q3 2015 CALL, AUGUST 2015
There's a lot of catalysts driving demand for industrial. I mentioned e-commerce, the re-onshoring of manufacturing plants, the Panama Canal. So, you're going to see a need for more industrial space, particularly on the eastern seaboard. The people who are engaging in spec building are doing so thoughtfully in the right markets and generating good returns in doing so.
No, I think we're covering everything fairly well. There is a misconception about the -- how sensitive REITs are to interest rates. And as Michael just pointed out, our interest rates are going down and will continue to go down and then they will level off at a rather low level. So the spreads are there and we're not as interest rate sensitive as some investors believe.
And the last point I want to make is, again, in terms of what people think about REITs, they're continuing to look at funds from operation, and of course we've got a great story to tell on funds from operation. But I have to tell you that a large part of the gain comes from total return, what these properties are going to be worth in the future. And we have tremendous gains in our portfolio, maybe as much as $250 million.
http://finance.yahoo.com/news/edited-transcript-mnr-earnings-conference-033451626.html
at $10 now
1/8/2015
could go to $12 again
like IR futures
longer and lower
http://www.snl.com/Cache/1500073618.PDF?Y=&O=PDF&D=&FID=1500073618&T=&IID=102974
Grant's: Unloved REIT
Firstly, Monmouth Real Estate Investment Corp., which first appeared in Grant's on Nov. 14, 2014, and then again on June 13, 2014. Monmouth has been a victim of the recent REIT sell-off, although despite these declines, the company’s underlying business continues to perform exceptionally well.
Grant's Monmouth
At time of writing, Monmouth’s stock has fallen 11.4% year to date. The market cap. stands at $582 million and the company supports a dividend yield of 6.1%. Shareholder equity is around $431 million, so the company trades at a slight premium to book. Net debt to total market cap stands at 33%, net debt represents 6.3 times EBITDA, covering fixed costs 2.3 times.
According to Grant's and Mike Landy, Monmouth’s president and CEO, Monmouth’s occupancy rate stands at 97.6% and the company’s gross leasable area stands at approximately 14 million square feet with 90 industrial properties across 28 states. Grant's notes that Monmouth has, historically, maintained a tenant retention rate of 90% and this year the retention rate has increased to 100%. Mike Landy:
“...we achieved a 100% tenant retention rate by renewing all six properties containing a total of 780,000 square feet, and we were able to generate a 6.3% increase in rents doing so. Our property portfolio has a weighted average lease maturity of 7.3 years, representing the youngest and most state-of-the-art portfolio in the industrial REIT sector.”
Monmouth not only has a state-of-the-art property portfolio with an exceptional retention rate, but 80% of the company’s clients support investment grade credit ratings. These clients are unlikely to leave the company out of pocket anytime soon. Chief amongst these is FedEx Corporation (
NYSE:FDX).
“Ultimately...Monmouth is a backdoor play on the growth in e-commerce. It’s not your conventional real estate strategy...To grow, Monmouth borrows 15-year money (fully amortizing) at less than 4% while earning cap rates in the high sixes. A 275 basis-point to 300 basis-point spread yields a 15% to 16% leveraged return on equity.”
