Whitestone REIT (NYSE: WSR)

Sector: Real Estate Industry: REIT - Retail CIK: 0001175535
Market Cap 751.54 Mn
P/B 1.78
P/E 30.46
P/S 5.07
ROIC (Qtr) 5.95
Div Yield % 3.45
Rev 1y % (Qtr) 6.25
Total Debt (Qtr) 642.38 Mn
Debt/Equity (Qtr) 1.46
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About

Whitestone REIT (WSR), a Maryland-based real estate investment trust (REIT), operates in the commercial property sector, with a focus on Community Centered Properties. These properties are strategically located in culturally diverse neighborhoods across major metropolitan areas and are designed to cater to the needs of the local community. The company's primary business activity involves the ownership and operation of commercial properties, which encompass retail, office, and industrial spaces. Whitestone REIT's revenue generation is multifaceted,...

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Investment thesis

Bull case

  • Operating cash flow of 52.98M provides exceptional 93.60x coverage of minority interest expenses 566000, showing strong core operations.
  • Operating cash flow of 52.98M provides strong 10.47x coverage of stock compensation 5.06M, indicating sustainable incentive practices.
  • Strong operating cash flow of 52.98M provides 2.49x coverage of SG&A expenses 21.26M, showing efficient operational cost management.
  • Cash position of 6.85M provides exceptional 12.10x coverage of minority interest expenses 566000, indicating strong liquidity.
  • Operating cash flow of 52.98M provides strong 2.28x coverage of operating expenses 23.22M, showing operational efficiency.

Bear case

  • Operating cash flow of 52.98M barely covers its investment activities of (23.76M), with a coverage ratio of -2.23, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 52.98M provides thin coverage of dividend payments of (26.80M) with a -1.98 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 15.59M provides weak coverage of capital expenditures of 37.39M, with a 0.42 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 78.17M show weak coverage of depreciation charges of 34.93M, with a 2.24 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 15.59M represents just -0.04x of debt issuance (363.58M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

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 1.21 1.13
EV to Cash from Ops. EV/CFO 25.60 22.52
EV to Debt EV to Debt 2.16 2.49
EV to EBIT EV/EBIT 23.68 42.49
EV to EBITDA EV/EBITDA 16.09 19.89
EV to Free Cash Flow [EV/FCF] EV/FCF 45.54 27.13
EV to Market Cap EV to Market Cap 1.85 461,431.31
EV to Revenue EV/Rev 9.36 13.31
Price to Book Value [P/B] P/B 1.78 3.17
Price to Earnings [P/E] P/E 30.46 177.24
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.66 0.69
Dividend Payout Ratio % Div Payout % (Qtr) 63.10 169.12
Dividend per Basic Share Div per Share (Qtr) 0.55 2.32
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 180.39 -68.66
Interest Coverage Int. cover (Qtr) 2.35 2.52
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -118.86 -12.09
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 170.24 68.41
Dividend Growth (1y) % Div 1y % (Qtr) 23.49 13.80
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 41.86 224.52
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 13.16 0.11
EBIT Growth (1y) % EBIT 1y % (Qtr) 40.46 222.92
EBT Growth (1y) % EBT 1y % (Qtr) 108.50 290.94
EPS Growth (1y) % EPS 1y % (Qtr) 107.14 273.30
FCF Growth (1y) % FCF 1y % (Qtr) -55.23 -81.48
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 4.19 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) 0.30 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) 1.46 -2.59
Interest Cover Ratio Int Coverage (Qtr) 2.35 2.52
Times Interest Earned Times Interest Earned (Qtr) 2.35 2.52
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 71.70 78.58
EBIT Margin % EBIT Margin % (Qtr) 49.54 45.34
EBT Margin % EBT Margin % (Qtr) 28.46 25.50
Gross Margin % Gross Margin % (Qtr) 69.60 73.99
Net Profit Margin % Net Margin % (Qtr) 28.20 23.85