Saul Centers, Inc. (NYSE: BFS)

Sector: Real Estate Industry: REIT - Retail CIK: 0000907254
Market Cap 752.18 Mn
P/B 2.40
P/E 22.75
P/S 3.50
ROIC (Qtr) 6.27
Div Yield % 6.78
Rev 1y % (Qtr) 7.01
Total Debt (Qtr) 1.59 Bn
Debt/Equity (Qtr) 5.02
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About

Saul Centers, Inc., often referred to as Saul Centers, is a real estate investment trust (REIT) that operates as a publicly traded company under the ticker symbol BFS. The company specializes in the ownership, development, and management of shopping centers, mixed-use properties, and residential properties, primarily within the Washington, D.C. metropolitan area. Saul Centers focuses on acquiring, developing, and managing properties near public transportation hubs, such as Metro stations, to create a unique and desirable living and shopping experience. The...

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Investment thesis

Bull case

  • Operating cash flow of 106.39M provides strong 58.39x coverage of stock compensation 1.82M, indicating sustainable incentive practices.
  • Tangible assets of 2.17B provide exceptional 91.56x coverage of deferred revenue 23.67M, showing strong service capability backing.
  • Strong operating cash flow of 106.39M provides 4x coverage of SG&A expenses 26.59M, showing efficient operational cost management.
  • Operating cash flow of 106.39M provides strong 4.49x coverage of deferred revenue 23.67M, indicating service delivery capability.
  • Tangible assets of 2.17B provide robust 36.76x coverage of receivables 58.97M, showing strong asset quality.

Bear case

  • Operating cash flow of 106.39M barely covers its investment activities of (117.83M), with a coverage ratio of -0.90, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 106.39M provides thin coverage of dividend payments of (57.10M) with a -1.86 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of (11.45M) provides weak coverage of capital expenditures of 117.83M, with a -0.10 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 106.50M show weak coverage of depreciation charges of 57.13M, with a 1.86 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of (11.45M) represents just -0.12x of debt issuance 99.09M, suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the REIT - Retail
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SPG Simon Property Group Inc. 62.65 Bn 27.30 11.19 26.32 Bn
2 O Realty Income Corp 15.99 Bn 61.56 15.32 28.37 Bn
3 KIM Kimco Realty Corp 14.22 Bn 20.86 8.63 8.35 Bn
4 REG Regency Centers Corp 14.06 Bn 27.37 9.05 4.98 Bn
5 PECO Phillips Edison & Company, Inc. 11.82 Bn 3,838.00 46.61 2.38 Bn
6 FRT Federal Realty Investment Trust 8.00 Bn 23.50 8.55 5.03 Bn
7 EPRT Essential Properties Realty Trust, Inc. 6.41 Bn 25.34 11.42 2.51 Bn
8 ADC Agree Realty Corp 5.53 Bn 44.48 15.36 3.29 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.74 1.13
EV to Cash from Ops. EV/CFO 17.05 22.52
EV to Debt EV to Debt 1.01 2.49
EV to EBIT EV/EBIT 17.68 42.49
EV to EBITDA EV/EBITDA 10.97 19.89
EV to Free Cash Flow [EV/FCF] EV/FCF 68.15 27.13
EV to Market Cap EV to Market Cap 2.13 461,431.31
EV to Revenue EV/Rev 7.45 13.31
Price to Book Value [P/B] P/B 2.40 3.17
Price to Earnings [P/E] P/E 22.75 177.24
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.41 0.69
Dividend Payout Ratio % Div Payout % (Qtr) 203.40 169.12
Dividend per Basic Share Div per Share (Qtr) 2.36 2.32
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -502.13 -68.66
Interest Coverage Int. cover (Qtr) 1.58 2.52
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 41.50 -12.09
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 63.79 68.41
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 13.80
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 1.11 224.52
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 1.87 0.11
EBIT Growth (1y) % EBIT 1y % (Qtr) 1.11 222.92
EBT Growth (1y) % EBT 1y % (Qtr) -29.89 290.94
EPS Growth (1y) % EPS 1y % (Qtr) -37.30 273.30
FCF Growth (1y) % FCF 1y % (Qtr) 85.00 -81.48
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 2.52 6.10
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.13 0.12
Cash Payout Ratio Cash Payout (Qtr) 0.27 0.14
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.00
Debt to Equity Ratio Debt/Equity (Qtr) 5.02 -2.59
Interest Cover Ratio Int Coverage (Qtr) 1.58 2.52
Times Interest Earned Times Interest Earned (Qtr) 1.58 2.52
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 57.90 78.58
EBIT Margin % EBIT Margin % (Qtr) 37.68 45.34
EBT Margin % EBT Margin % (Qtr) 13.83 25.50
Gross Margin % Gross Margin % (Qtr) 71.60 73.99
Net Profit Margin % Net Margin % (Qtr) 9.90 23.85