Broadstone Net Lease, Inc. (BNL) Stock Analysis and Metrics

Sector: Real Estate Industry: REIT - Diversified CIK: 0001424182

Market Cap 2.77 Bn

P/B 1.09

P/E 40.51

P/S 8.39

ROIC (Qtr) 3.24

Div Yield % 5.94

Rev 1y % (Qtr) 5.32

Total Debt (Qtr) 2.34 Bn

Debt/Equity (Qtr) 0.81

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About

Broadstone Net Lease, Inc. (BNL), a diversified net lease real estate investment trust (REIT), operates primarily in the commercial real estate sector, investing in single-tenant properties that are net leased on a long-term basis. As of December 31, 2023, the company's portfolio included 796 properties, spread across 44 U.S. states and four Canadian provinces. The company's primary business activities revolve around acquiring, financing, and developing single-tenant commercial real estate properties, with a focus on the industrial, restaurant,...

Broadstone Net Lease, Inc. (BNL), a diversified net lease real estate investment trust (REIT), operates primarily in the commercial real estate sector, investing in single-tenant properties that are net leased on a long-term basis. As of December 31, 2023, the company's portfolio included 796 properties, spread across 44 U.S. states and four Canadian provinces.

The company's primary business activities revolve around acquiring, financing, and developing single-tenant commercial real estate properties, with a focus on the industrial, restaurant, retail, and consumer-centric healthcare and veterinary property types. BNL prioritizes investments in properties operated by creditworthy single tenants, within industries characterized by positive business drivers and trends.

Revenue for BNL is primarily generated through the collection of base rents and rent escalations from its tenants. As of December 31, 2023, the company's portfolio was approximately 99.4% leased, with an average remaining lease term of 10.5 years. Leases typically provide for periodic contractual rent escalations, with an average annual minimum increase of 2.0%.

Competition for BNL comes from other owners and operators of commercial real estate, as well as other REITs and private and institutional real estate investors. However, the company boasts several competitive advantages, including a diversified portfolio, long-term leases, and strong tenant relationships.

Customers of BNL include a diverse group of tenants, such as industrial manufacturers, food processors, restaurants, retailers, and healthcare providers. The company's top 10 tenants accounted for approximately 19.6% of its ABR as of December 31, 2023, with no single tenant representing more than 4.1% of its ABR.

Broadstone Net Lease, Inc. is a publicly traded company listed on the New York Stock Exchange (NYSE) under the ticker symbol BNL. Its common stock is also traded on the NYSE under the same symbol.

In 2023, BNL invested $165.6 million in three development funding opportunities and four property acquisitions, generating net income of $163.3 million, or $0.83 per diluted share. The company also generated funds from operations (FFO) of $298.6 million, or $1.52 per diluted share, and core FFO of $298.9 million, or $1.52 per diluted share.

Brand names and/or trade names of BNL's products and services include Broadstone Net Lease, Inc. and BNL.

Investment thesis

Bull case

Operating cash flow of 278.84M provides exceptional 124.70x coverage of minority interest expenses 2.24M, showing strong core operations.
Operating cash flow of 278.84M provides strong 30.70x coverage of stock compensation 9.08M, indicating sustainable incentive practices.
Strong operating cash flow of 278.84M provides 7.12x coverage of SG&A expenses 39.15M, showing efficient operational cost management.
Cash position of 81.97M provides exceptional 36.66x coverage of minority interest expenses 2.24M, indicating strong liquidity.
Operating cash flow of 278.84M provides strong 5.29x coverage of operating expenses 52.76M, showing operational efficiency.

Bear case

Operating cash flow of 278.84M barely covers its investment activities of (363.31M), with a coverage ratio of -0.77, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Operating cash flow of 278.84M provides thin coverage of dividend payments of (218.69M) with a -1.28 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
Free cash flow of (84.47M) provides weak coverage of capital expenditures of 363.31M, with a -0.23 ratio suggesting additional external financing needs for growth initiatives.
Operating earnings of 180.03M show weak coverage of depreciation charges of 160.86M, with a 1.12 ratio indicating high capital intensity and potential reinvestment needs.
High depreciation of 160.86M relative to operating cash flow of 278.84M, which is 0.58x suggests significant maintenance capital requirements affecting free cash flow.

Peer comparison

Companies in the REIT - Diversified

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	VICI	Vici Properties Inc.	30.39 Bn	11.76	8.24	16.76 Bn
2	WPC	W. P. Carey Inc.	16.39 Bn	35.15	9.55	8.72 Bn
3	BNL	Broadstone Net Lease, Inc.	2.77 Bn	40.51	8.39	2.34 Bn
4	SAFE	Safehold Inc.	1.15 Bn	10.07	2.99	4.59 Bn
5	AAT	American Assets Trust, Inc.	1.13 Bn	20.37	2.60	1.69 Bn
6	ESRT	Empire State Realty Trust, Inc.	0.91 Bn	16.82	1.33	2.06 Bn
7	CTO	CTO Realty Growth, Inc.	0.60 Bn	6,383.33	35.13	0.60 Bn
8	GNL	Global Net Lease, Inc.	0.57 Bn	11.86	2.57	2.93 Bn

Industry comparisons

Current Valuation	Value	Ind Avg
EV to Assets EV to Assets	0.77	0.68
EV to Cash from Ops. EV/CFO	21.49	-30.44
EV to Debt EV to Debt	1.83	1.31
EV to EBIT EV/EBIT	31.30	52.23
EV to EBITDA EV/EBITDA	16.69	6.51
EV to Free Cash Flow [EV/FCF] EV/FCF	-37.08	21.01
EV to Market Cap EV to Market Cap	1.54	6.71
EV to Revenue EV/Rev	12.91	9.65
Price to Book Value [P/B] P/B	1.09	0.98
Price to Earnings [P/E] P/E	40.51	385.22

Dividend Metrics	Value	Ind Avg
Dividend Coverage Ratio Div Coverage (Qtr)	0.41	-1.16
Dividend Payout Ratio % Div Payout % (Qtr)	241.70	90.61
Dividend per Basic Share Div per Share (Qtr)	1.16	1.00
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr)	-258.35	-0.65
Interest Coverage Int. cover (Qtr)	2.02	0.73

Growth Metrics	Value	Ind Avg
Capex Growth (1y) % Capex 1y % (Qtr)	-166.01	-246.98
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr)	810.83	49.26
Dividend Growth (1y) % Div 1y % (Qtr)	0.00	2.40
EBIAT Growth (1y) % EBIAT 1y % (Qtr)	-17.76	-20.77
EBITDA Growth (1y) % EBITDA 1y % (Qtr)	10.23	-2.00
EBIT Growth (1y) % EBIT 1y % (Qtr)	-16.81	-20.80
EBT Growth (1y) % EBT 1y % (Qtr)	-36.29	-13.26
EPS Growth (1y) % EPS 1y % (Qtr)	-36.84	-38.39
FCF Growth (1y) % FCF 1y % (Qtr)	-161.95	-62.73
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr)	4.43	-1.85

Liquidity Ratios	Value	Ind Avg
Asset Utilization Ratio Asset Util Ratio (Qtr)	0.08	0.11
Cash Payout Ratio Cash Payout (Qtr)	0.34	0.34
Cash Ratio Cash Ratio	0.00	0.00
Current Ratio Current Ratio	0.00	0.00
Debt to Equity Ratio Debt/Equity (Qtr)	0.81	0.82
Interest Cover Ratio Int Coverage (Qtr)	2.02	0.73
Times Interest Earned Times Interest Earned (Qtr)	2.02	0.73

Profitability	Value	Ind Avg
EBITDA Margin % EBITDA Margin % (Qtr)	76.10	38.58
EBIT Margin % EBIT Margin % (Qtr)	40.19	10.26
EBT Margin % EBT Margin % (Qtr)	20.32	-13.89
Gross Margin % Gross Margin % (Qtr)	57.90	59.91
Net Profit Margin % Net Margin % (Qtr)	20.00	-17.09

Research Tools

Broadstone Net Lease, Inc. (NYSE: BNL)

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Investment thesis

Bull case

Bear case

Peer comparison

Industry comparisons

Research Tools

Broadstone Net Lease, Inc. (NYSE: BNL)

About

Investment thesis

Bull case

Bear case

Peer comparison

Industry comparisons

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