Transcontinental Realty Investors Inc (NYSE: TCI)

Sector: Real Estate Industry: Real Estate Services CIK: 0000733590
Market Cap 449.34 Mn
P/B 0.54
P/E 79.97
P/S 9.21
ROIC (Qtr) -0.14
Div Yield % 0.00
Rev 1y % (Qtr) 10.58
Total Debt (Qtr) 223.49 Mn
Debt/Equity (Qtr) 0.27

About

Transcontinental Realty Investors Inc., or TCI, is a company that operates in the real estate industry, specifically in the Southern United States. Its primary business activities encompass the acquisition, development, ownership, and management of multifamily and commercial properties. The company's portfolio includes 14 multifamily properties with 2,328 units and four commercial properties that total approximately 1,056,793 square feet. Additionally, TCI owns around 1,843 acres of developed and undeveloped land. TCI generates its revenue primarily...

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Price action

Investment thesis

Bull case

  • Strong tangible asset base of 1.13B provides 5.08x coverage of total debt 223.49M, indicating robust asset backing and low credit risk.
  • Tangible assets of 1.13B provide exceptional 1952.59x coverage of deferred revenue 581000, showing strong service capability backing.
  • Cash position of 29.64M provides exceptional 44.50x coverage of minority interest expenses 666000, indicating strong liquidity.
  • Retained earnings of 576.30M represent substantial 0.69x of equity 838.40M, indicating strong internal capital generation.
  • Cash position of 29.64M provides strong 51.02x coverage of deferred revenue 581000, ensuring service delivery capability.

Bear case

  • Operating cash flow of (17.92M) barely covers its investment activities of (63.65M), with a coverage ratio of 0.28, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of (17.92M) provides insufficient coverage of deferred revenue obligations of 581000, which is -30.85x, raising concerns about future service delivery capabilities.
  • Free cash flow of (105.87M) provides weak coverage of capital expenditures of 87.95M, with a -1.20 ratio suggesting additional external financing needs for growth initiatives.
  • Operating cash flow of (17.92M) provides minimal -3.55x coverage of tax expenses of 5.05M, suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Operating earnings of 17.67M show weak coverage of depreciation charges of 11.79M, with a 1.50 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Real Estate Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CBRE Cbre Group, Inc. 51.14 Bn 41.65 1.30 9.48 Bn
2 CSGP Costar Group, Inc. 26.47 Bn 1,304.00 8.66 1.18 Bn
3 BEKE KE Holdings Inc. 21.08 Bn 43.29 1.45 2.96 Bn
4 JLL Jones Lang Lasalle Inc 16.90 Bn 26.75 0.67 3.48 Bn
5 FSV FirstService Corp 7.01 Bn 56.92 1.78 1.51 Bn
6 COMP Compass, Inc. 6.69 Bn -118.64 1.01 0.48 Bn
7 CIGI Colliers International Group Inc. 5.39 Bn 69.70 2.00 2.50 Bn
8 OPEN Opendoor Technologies Inc. 4.15 Bn -13.09 0.88 1.79 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.55 1.34
EV to Cash from Ops. EV/CFO -35.02 2.97
EV to Debt EV to Debt 2.81 6.15
EV to EBIT EV/EBIT 35.51 5.23
EV to EBITDA EV/EBITDA 86.60 18.71
EV to Free Cash Flow [EV/FCF] EV/FCF -5.93 -9.39
EV to Market Cap EV to Market Cap 1.40 4.27
EV to Revenue EV/Rev 12.86 3.62
Price to Book Value [P/B] P/B 0.54 2.10
Price to Earnings [P/E] P/E 79.97 45.45
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 0.38
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -6.05
Dividend per Basic Share Div per Share (Qtr) 0.00 0.22
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 0.42
Interest Coverage Int. cover (Qtr) 2.52 -2.22
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -122.42 -12,525.88
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -57.10 23.84
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.27
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 4.82 4.69
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -3.45 26.73
EBIT Growth (1y) % EBIT 1y % (Qtr) 47.35 12.80
EBT Growth (1y) % EBT 1y % (Qtr) 147.38 21.27
EPS Growth (1y) % EPS 1y % (Qtr) 68.42 22.42
FCF Growth (1y) % FCF 1y % (Qtr) -72.42 54.29
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 3.53 39.11
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.04 1.45
Cash Payout Ratio Cash Payout (Qtr) 0.00 -0.01
Cash Ratio Cash Ratio 0.00 1.45
Current Ratio Current Ratio 0.00 2.16
Debt to Equity Ratio Debt/Equity (Qtr) 0.27 -0.06
Interest Cover Ratio Int Coverage (Qtr) 2.52 -2.22
Times Interest Earned Times Interest Earned (Qtr) 2.52 -2.22
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 60.40 -121.98
EBIT Margin % EBIT Margin % (Qtr) 36.22 -136.76
EBT Margin % EBT Margin % (Qtr) 21.86 -144.54
Gross Margin % Gross Margin % (Qtr) 44.90 32.87
Net Profit Margin % Net Margin % (Qtr) 11.50 -139.89