Postal Realty Trust, Inc. (NYSE: PSTL)

Sector: Real Estate Industry: REIT - Office CIK: 0001759774
Market Cap 96.42 Mn
P/B 1.97
P/E -64.40
P/S 8.54
ROIC (Qtr) 5.16
Div Yield % 3.18
Rev 1y % (Qtr) 23.69
Total Debt (Qtr) 347.00 Mn
Debt/Equity (Qtr) 1.27
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About

Investment thesis

Bull case

  • Strong operating cash flow of 42.37M provides 2.50x coverage of SG&A expenses 16.92M, showing efficient operational cost management.
  • Strong free cash flow of (81.76M) provides 280.96x coverage of acquisition spending (291000), indicating disciplined M&A strategy.
  • Strong tangible asset base of 718.87M provides 44.06x coverage of intangibles 16.32M, indicating robust asset quality.
  • Operating cash flow of 42.37M exceeds receivables of 11.53M by 3.67x, demonstrating excellent collection efficiency.
  • Tangible assets of 718.87M provide robust 62.34x coverage of receivables 11.53M, showing strong asset quality.

Bear case

  • Operating cash flow of 42.37M barely covers its investment activities of (117.02M), with a coverage ratio of -0.36, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 42.37M provides thin coverage of dividend payments of (29.83M) with a -1.42 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 1.90M provide limited coverage of acquisition spending of (291000), which is -6.54x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Free cash flow of (81.76M) provides weak coverage of capital expenditures of 124.12M, with a -0.66 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 28.51M show weak coverage of depreciation charges of 23.27M, with a 1.22 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the REIT - Office
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 BXP BXP, Inc. 9.52 Bn 10.44 3.12 17.35 Bn
2 ARE Alexandria Real Estate Equities, Inc. 9.27 Bn -6.45 3.06 12.40 Bn
3 VNO Vornado Realty Trust 5.56 Bn 6.60 3.07 7.89 Bn
4 KRC Kilroy Realty Corp 3.77 Bn 13.65 3.39 4.59 Bn
5 CDP Copt Defense Properties 3.33 Bn 46.00 5.75 2.49 Bn
6 SLG Sl Green Realty Corp 2.75 Bn -24.56 2.74 5.97 Bn
7 HIW Highwoods Properties, Inc. 2.49 Bn 15.83 3.09 3.55 Bn
8 CUZ Cousins Properties Inc 2.44 Bn 24.76 4.97 3.34 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.14 0.66
EV to Cash from Ops. EV/CFO 36.97 35.35
EV to Debt EV to Debt 0.30 1.60
EV to EBIT EV/EBIT -294.66 -177.85
EV to EBITDA EV/EBITDA 27.32 15.22
EV to Free Cash Flow [EV/FCF] EV/FCF -1.52 -21.54
EV to Market Cap EV to Market Cap 1.10 14.69
EV to Revenue EV/Rev 9.36 6.06
Price to Book Value [P/B] P/B 1.97 0.76
Price to Earnings [P/E] P/E -64.40 3.15
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.47 -2.81
Dividend Payout Ratio % Div Payout % (Qtr) 201.30 86.83
Dividend per Basic Share Div per Share (Qtr) 0.73 1.13
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -21.87 -31.14
Interest Coverage Int. cover (Qtr) 1.98 -0.15
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -73.63 -13.82
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 96.08 8.92
Dividend Growth (1y) % Div 1y % (Qtr) -24.38 -13.06
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 98.40 -81.02
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 44.20 -59.28
EBIT Growth (1y) % EBIT 1y % (Qtr) 94.16 -85.68
EBT Growth (1y) % EBT 1y % (Qtr) 318.33 -24.55
EPS Growth (1y) % EPS 1y % (Qtr) 500.00 393.08
FCF Growth (1y) % FCF 1y % (Qtr) -103.96 148.67
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 33.28 -2.47
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.12 0.13
Cash Payout Ratio Cash Payout (Qtr) 0.18 0.24
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.00
Debt to Equity Ratio Debt/Equity (Qtr) 1.27 1.46
Interest Cover Ratio Int Coverage (Qtr) 1.98 -0.15
Times Interest Earned Times Interest Earned (Qtr) 1.98 -0.15
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 56.80 29.81
EBIT Margin % EBIT Margin % (Qtr) 31.26 -4.47
EBT Margin % EBT Margin % (Qtr) 15.44 -25.12
Gross Margin % Gross Margin % (Qtr) 78.20 60.66
Net Profit Margin % Net Margin % (Qtr) 15.40 -26.43