Tejon Ranch Co (NYSE: TRC)

Sector: Industrials Industry: Conglomerates CIK: 0000096869
Market Cap 423.48 Mn
P/B 0.89
P/E 142.25
P/S 9.12
ROIC (Qtr) -3.47
Div Yield % 0.00
Rev 1y % (Qtr) 10.25
Total Debt (Qtr) 91.94 Mn
Debt/Equity (Qtr) 0.19
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About

Tejon Ranch Co (TRC) is a diversified real estate development and agribusiness company operating primarily in California. The company's main business activities include land planning and entitlement, land development, commercial land sales and leasing, leasing of land for mineral royalties, water asset management and sales, grazing leases, farming, and ranch operations. Tejon Ranch Co generates revenue through its primary products and services, including real estate development, commercial and industrial leasing, and agricultural operations. Its...

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Investment thesis

Bull case

  • Strong tangible asset base of 629.59M provides 6.85x coverage of total debt 91.94M, indicating robust asset backing and low credit risk.
  • Tangible assets of 629.59M provide exceptional 45.56x coverage of deferred revenue 13.82M, showing strong service capability backing.
  • Strong free cash flow of (56.42M) provides 34.74x coverage of acquisition spending (1.62M), indicating disciplined M&A strategy.
  • Robust tangible asset base of 629.59M provides 27.59x coverage of working capital 22.82M, indicating strong operational backing.
  • Retained earnings of 110.09M provide full 1.20x coverage of long-term debt 91.94M, indicating strong internal capital position.

Bear case

  • Operating cash flow of 9.16M barely covers its investment activities of (64.47M), with a coverage ratio of -0.14, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 3.57M provide limited coverage of acquisition spending of (1.62M), which is -2.20x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 9.16M provides insufficient coverage of deferred revenue obligations of 13.82M, which is 0.66x, raising concerns about future service delivery capabilities.
  • Short-term investments of 17.47M significantly exceed cash reserves of 3.57M, which is 4.89x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
  • Free cash flow of (56.42M) provides weak coverage of capital expenditures of 65.59M, with a -0.86 ratio suggesting additional external financing needs for growth initiatives.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Conglomerates
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 HON Honeywell International Inc 155.07 Bn 32.79 4.14 34.58 Bn
2 MMM 3M Co 100.16 Bn 20.62 3.16 12.60 Bn
3 VMI Valmont Industries Inc 11.52 Bn 79.14 5.93 0.86 Bn
4 SEB Seaboard Corp /De/ 4.74 Bn 9.55 0.49 1.82 Bn
5 MDU Mdu Resources Group Inc 3.80 Bn 15.84 0.97 2.35 Bn
6 OTTR Otter Tail Corp 3.60 Bn 20.35 3.01 1.04 Bn
7 BBU Brookfield Business Partners L.P. 2.64 Bn -19.71 0.10 43.31 Bn
8 TTI Tetra Technologies Inc 1.44 Bn 11.77 2.33 0.21 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.80 1.07
EV to Cash from Ops. EV/CFO 54.89 26.27
EV to Debt EV to Debt 5.47 3.17
EV to EBIT EV/EBIT 206.96 28.37
EV to EBITDA EV/EBITDA -195.61 2.98
EV to Free Cash Flow [EV/FCF] EV/FCF -8.91 24.12
EV to Market Cap EV to Market Cap 1.19 2.07
EV to Revenue EV/Rev 10.83 3.10
Price to Book Value [P/B] P/B 0.89 0.16
Price to Earnings [P/E] P/E 142.25 -51.36
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 2.51
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 16.94
Dividend per Basic Share Div per Share (Qtr) 0.00 1.03
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 -1.97
Interest Coverage Int. cover (Qtr) 0.00 4.08
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -34.62 -245.15
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -86.95 116.15
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -1.11
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 1,405.70 233.90
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 70.57 6.29
EBIT Growth (1y) % EBIT 1y % (Qtr) 234.25 58.90
EBT Growth (1y) % EBT 1y % (Qtr) 234.25 -70.32
EPS Growth (1y) % EPS 1y % (Qtr) 0.00 179.10
FCF Growth (1y) % FCF 1y % (Qtr) -15.69 22.76
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 437.13 19.56
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.07 0.64
Cash Payout Ratio Cash Payout (Qtr) 0.00 -0.01
Cash Ratio Cash Ratio (Qtr) 0.26 0.34
Current Ratio Curr Ratio (Qtr) 2.66 1.70
Debt to Equity Ratio Debt/Equity (Qtr) 0.19 -5.62
Interest Cover Ratio Int Coverage (Qtr) 0.00 4.08
Times Interest Earned Times Interest Earned (Qtr) 0.00 4.08
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 17.20 -14.03
EBIT Margin % EBIT Margin % (Qtr) 5.23 -16.67
EBT Margin % EBT Margin % (Qtr) 5.23 -20.17
Gross Margin % Gross Margin % (Qtr) 13.30 21.90
Net Profit Margin % Net Margin % (Qtr) 6.40 -21.67