Phillips Edison & Company, Inc. (NASDAQ: PECO)

Sector: Real Estate Industry: REIT - Retail CIK: 0001476204
Market Cap 11.82 Bn
P/B 9.76
P/E 3,838.00
P/S 46.61
ROIC (Qtr) 4.26
Div Yield % 0.28
Rev 1y % (Qtr) 8.56
Total Debt (Qtr) 2.38 Bn
Debt/Equity (Qtr) 1.04
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About

Phillips Edison & Company, Inc., or PECO, is a real estate investment trust (REIT) that operates in the United States, specializing in the acquisition, development, and management of grocery-anchored shopping centers. The company was established in 1991 and has its headquarters in Cincinnati, Ohio. With a portfolio of over 281 shopping centers across 31 states, PECO is a significant player in the U.S. real estate industry. PECO's main business activities revolve around the ownership and management of neighborhood shopping centers, which are typically...

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Investment thesis

Bull case

  • Operating cash flow of 348.15M provides exceptional 29.85x coverage of minority interest expenses 11.66M, showing strong core operations.
  • Operating cash flow of 348.15M provides strong 29.80x coverage of stock compensation 11.68M, indicating sustainable incentive practices.
  • Strong operating cash flow of 348.15M provides 6.74x coverage of SG&A expenses 51.64M, showing efficient operational cost management.
  • Tangible assets of 5.26B provide exceptional 228.14x coverage of deferred revenue 23.04M, showing strong service capability backing.
  • Operating cash flow of 348.15M provides strong 15.11x coverage of deferred revenue 23.04M, indicating service delivery capability.

Bear case

  • Operating cash flow of 348.15M barely covers its investment activities of (392.29M), with a coverage ratio of -0.89, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 348.15M provides thin coverage of dividend payments of (157.28M) with a -2.21 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 43.31M provide limited coverage of acquisition spending of (11.83M), which is -3.66x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Free cash flow of (26.55M) provides weak coverage of capital expenditures of 374.70M, with a -0.07 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 221.64M show weak coverage of depreciation charges of 266.37M, with a 0.83 ratio indicating high capital intensity and potential reinvestment needs.

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 2.69 1.13
EV to Cash from Ops. EV/CFO 141.29 22.52
EV to Debt EV to Debt 5.98 2.49
EV to EBIT EV/EBIT 382.14 42.49
EV to EBITDA EV/EBITDA 102.59 19.89
EV to Free Cash Flow [EV/FCF] EV/FCF -240.47 27.13
EV to Market Cap EV to Market Cap 1.20 461,431.31
EV to Revenue EV/Rev 55.99 13.31
Price to Book Value [P/B] P/B 9.76 3.17
Price to Earnings [P/E] P/E 3,838.00 177.24
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.71 0.69
Dividend Payout Ratio % Div Payout % (Qtr) 140.30 169.12
Dividend per Basic Share Div per Share (Qtr) 1.26 2.32
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -595.73 -68.66
Interest Coverage Int. cover (Qtr) 2.01 2.52
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 4.26 -12.09
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 400.77 68.41
Dividend Growth (1y) % Div 1y % (Qtr) 4.75 13.80
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 38.81 224.52
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 9.34 0.11
EBIT Growth (1y) % EBIT 1y % (Qtr) 38.81 222.92
EBT Growth (1y) % EBT 1y % (Qtr) 77.56 290.94
EPS Growth (1y) % EPS 1y % (Qtr) 74.51 273.30
FCF Growth (1y) % FCF 1y % (Qtr) 53.14 -81.48
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 9.72 6.10
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.14 0.12
Cash Payout Ratio Cash Payout (Qtr) 0.22 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) 1.04 -2.59
Interest Cover Ratio Int Coverage (Qtr) 2.01 2.52
Times Interest Earned Times Interest Earned (Qtr) 2.01 2.52
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 67.20 78.58
EBIT Margin % EBIT Margin % (Qtr) 30.50 45.34
EBT Margin % EBT Margin % (Qtr) 15.32 25.50
Gross Margin % Gross Margin % (Qtr) 71.10 73.99
Net Profit Margin % Net Margin % (Qtr) 15.30 23.85