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H&R Real Estate ate Staple (TSE:HR.UN)
TSX:HR.UN
RESEARCH TOOLSreports
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H&R Real Estate ate Staple
(TSX:HR.UN)
58Neutral
Positive Factors
Operational Performance
Operational results showed strong performance with retail at +8.2%, residential at +5.1%, and industrial at 4.5%.
Strategic Portfolio Shift
The REIT has delivered concrete progress reorienting its business towards higher growth multifamily and industrial assets over the past few years.
Valuation
An undemanding valuation with an implied cap rate of 8.4% drives a risk/reward that skews positive.
Negative Factors
Lease Spreads
Sunbelt blended lease spreads of -2.1% in Q1 improved 380bps sequentially, though Q2 spreads are just into positive territory.
Market Conditions
H&R has shown a propensity for strong execution on past dispositions, despite difficult macro conditions.
H&R Real Estate ate Staple (HR.UN) vs. S&P 500 (SPY)
Market Cap
C$2.66B
Dividend Yield5.92%
Average Volume (3M)460.62K
Price to Earnings (P/E)―
Beta (1Y)0.82
Revenue Growth-6.43%
EPS Growth-35204.55%
CountryCA
Employees777
SectorReal Estate
Sector Strength67
IndustryREIT - Diversified
Share Statistics
EPS (TTM)-0.20
Shares Outstanding262,565,580
10 Day Avg. Volume440,193
30 Day Avg. Volume460,620
Financial Highlights & Ratios
PEG Ratio-0.40
Price to Book (P/B)0.49
Price to Sales (P/S)0.00
P/FCF Ratio10.11
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$11.50Price Target Upside13.41% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
H&R Real Estate ate Staple Business Overview & Revenue Model
Company DescriptionH&R Real Estate Investment Trust (HR.UN) is a diversified real estate investment trust based in Canada. The company specializes in owning, operating, and developing a wide array of properties across residential, industrial, office, and retail sectors. With a strategic focus on high-quality properties, H&R REIT aims to deliver consistent income and growth for its investors through its diversified portfolio.
How the Company Makes MoneyH&R Real Estate Investment Trust generates revenue primarily through rental income from its diversified portfolio of properties. The company leases space to various tenants across different sectors, including residential, industrial, office, and retail. These leases provide a stable source of cash flow, which is further enhanced by strategic property management and development activities. Additionally, H&R REIT engages in property development and redevelopment projects, which can lead to capital appreciation and increased rental income. The trust may also leverage partnerships with other real estate entities to optimize its portfolio and maximize returns. Overall, H&R REIT's earnings are driven by its ability to maintain high occupancy rates, manage operating costs effectively, and strategically expand its asset base.
H&R Real Estate ate Staple Financial Statement Overview
Summary
Overall, H&R Real Estate Staple is facing significant financial challenges, with declining revenues and profitability, increasing leverage, and operational inefficiencies. While the company maintains stable cash flow generation, the negative trends in income and balance sheet metrics underscore potential risks and the need for strategic adjustments to improve financial health.Income Statement
The income statement shows a concerning trend with decreasing revenue and net income over the years. Gross profit margin has declined from 61.9% in 2019 to 61.1% in 2024, indicating reduced operational efficiency. There is a significant drop in net profit margin, from 29.6% in 2019 to -14.6% in 2024, reflecting increasing losses. The absence of EBIT and negative EBITDA in 2024 highlight ongoing operational challenges.45
Neutral
Balance Sheet
The balance sheet reveals a declining equity base and increasing leverage. The debt-to-equity ratio has worsened from 0.91 in 2019 to 0.67 in 2024, reflecting a cautious improvement in leverage but still indicating high reliance on debt. Return on equity has turned negative, signifying inefficiencies in generating returns for shareholders. The equity ratio has also decreased, suggesting a declining proportion of assets financed by equity.55
Neutral
Cash Flow
The cash flow statement presents a mixed picture. Operating cash flow has been relatively stable, but free cash flow has shown volatility. The free cash flow growth rate was negative from 2023 to 2024, highlighting potential liquidity issues. The operating cash flow to net income ratio indicates the company is generating cash despite net losses, but the free cash flow to net income ratio shows challenges in converting revenue into free cash flow.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 816.99M | 903.63M | 834.64M | 1.07B | 1.10B | Gross Profit |
| 499.34M | 603.09M | 534.95M | 661.58M | 663.67M | EBIT |
| 471.23M | 578.71M | -78.93M | 414.00M | 453.90M | EBITDA |
| -35.07M | 627.04M | 506.68M | 820.29M | 651.82M | Net Income Common Stockholders |
| -119.71M | 61.69M | 844.82M | 597.91M | -624.56M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 100.35M | 64.11M | 76.89M | 124.14M | 62.86M | Total Assets |
| 10.62B | 10.78B | 11.41B | 10.50B | 13.36B | Total Debt |
| 3.54B | 3.72B | 3.95B | 3.92B | 6.40B | Net Debt |
| 3.44B | 3.65B | 3.88B | 3.80B | 6.34B | Total Liabilities |
| 5.34B | 5.59B | 5.93B | 5.73B | 7.28B | Stockholders Equity |
| 5.28B | 5.19B | 5.49B | 4.77B | 6.07B |
| Cash Flow | Free Cash Flow | |||
| 234.48M | 253.46M | 219.47M | 405.02M | 373.95M | Operating Cash Flow |
| 274.07M | 294.63M | 255.05M | 452.11M | 426.93M | Investing Cash Flow |
| 173.15M | 112.86M | 225.95M | 1.50B | -183.24M | Financing Cash Flow |
| -410.98M | -420.26M | -528.26M | -1.89B | -229.47M |
H&R Real Estate ate Staple Technical Analysis
Positive
10.14
Price Trends
9.81
Positive
9.61
Positive
9.76
Positive
Market Momentum
0.11
Negative
60.54
Neutral
75.31
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:HR.UN, the sentiment is Positive. The current price of 10.14 is above the 20-day moving average (MA) of 9.85, above the 50-day MA of 9.81, and above the 200-day MA of 9.76, indicating a bullish trend. The MACD of 0.11 indicates Negative momentum. The RSI at 60.54 is Neutral, neither overbought nor oversold. The STOCH value of 75.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:HR.UN.
H&R Real Estate ate Staple Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | C$312.33M | 7.99 | 8.03% | 8.47% | 3.34% | 10.20% | |
69 Neutral | C$2.70B | ― | -0.49% | 6.10% | 6.96% | 85.15% | |
60 Neutral | $2.82B | 10.29 | 0.39% | 8508.26% | 5.90% | -17.41% | |
59 Neutral | C$384.82M | ― | -3.77% | 4.04% | 0.18% | 68.25% | |
59 Neutral | C$328.03M | 12.21 | 5.68% | 8.32% | -1.07% | 684.07% | |
58 Neutral | C$2.66B | ― | -3.89% | 5.92% | -6.43% | -35204.55% | |
58 Neutral | C$712.53M | ― | -1.80% | 8.31% | -13.42% | 86.55% |
* Real Estate Sector Average
Performance Comparison
TSE:HR.UN
H&R Real Estate ate Staple
10.14
1.29
14.58%
TSE:AX.UN
Artis Real Estate Investment
7.26
1.27
21.30%
TSE:CRR.UN
Crombie Real Estate ate
14.58
2.39
19.61%
TSE:BTB.UN
BTB REIT
3.54
0.57
19.19%
TSE:MRT.UN
Morguard Real Estate ate
5.94
0.83
16.24%
TSE:PRV.UN
PRO Real Estate Investment
5.41
0.52
10.63%
H&R Real Estate ate Staple Earnings Call Summary
Earnings Call Date:May 14, 2025
(Q1-2025)
| % Change Since: -0.88%|
Next Earnings Date:Aug 13, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with strong liquidity and growth in the industrial and retail segments. However, challenges in the residential market, geopolitical uncertainties, and difficulties in asset sales balanced the positive aspects.Q1-2025 Updates
Positive Updates
Strong Liquidity Position
H&R REIT reported liquidity in excess of $870 million as of March 31, 2025, with an unencumbered property pool of approximately $4.5 billion.
Industrial Segment Performance
The industrial segment's same property net operating income increased by 4.5%, and the average Canadian industrial rent increased from $7.17 per square foot in June 2021 to $9.52 per square foot in March 2025.
Retail Segment Growth
Retail segment's same property net operating income increased by 8.2% due to occupancy gains at River Landing and Forex.
High Occupancy and Tenant Quality in Office Segment
Office occupancy was 96.7% with 87.8% of office revenue from investment-grade tenants; this segment saw a 1.2% increase in same property net operating income.
Negative Updates
Residential Segment Challenges
Residential segment's property net operating income decreased by 0.8% in U.S. dollars due to new supply and higher property operating costs.
Blended Lease Trade-Outs in Sunbelt Markets
Blended lease trade-outs in the Sunbelt were negative 2.1% in Q1, though there was an improvement from the previous quarter.
Market and Geopolitical Uncertainty
The company faces challenges due to multifamily supply concerns, weak office markets, inflation, and geopolitical uncertainties, including tariffs.
Echo Portfolio and Retail Asset Sales
Challenges in selling retail and Echo assets due to market conditions and liquidity issues in the debt and equity markets.
Company Guidance
During the H&R Real Estate Investment Trust's 2025 First Quarter Earnings Conference Call, the company provided insights into its financial and operational performance. The property net operating income grew by 4.4% on a cash basis, with the office segment seeing a 1.2% increase and the retail segment experiencing an 8.2% rise in same property net operating income. However, the residential segment saw a decrease of 0.8% due to declining average rental rates and higher operating costs in certain areas, while the industrial segment's income increased by 4.5%. The office occupancy rate stood at 96.7% with an average lease term of 5.8 years, and the retail portfolio comprised 15% of the overall portfolio value. The company maintained a strong balance sheet with a debt-to-total assets ratio of 44.1% and liquidity exceeding $870 million. Additionally, H&R REIT sold eight retail assets for $60 million and continued to focus on strategic asset recycling and development opportunities, particularly in the Sunbelt region. The REIT also highlighted the strong demand in its multifamily platform, stable resident retention, and ongoing development projects, including a pipeline of over 2,900 suites.H&R Real Estate ate Staple Corporate Events
Business Operations and StrategyFinancial Disclosures
H&R REIT Reports Strong Q1 2025 Results Amid Strategic Asset Repositioning
Positive
May 14, 2025
H&R REIT reported its financial results for the first quarter of 2025, highlighting a successful quarter with a 4.4% growth in same-property net operating income and an occupancy rate of 95.6%. Despite a decrease in total assets and net income compared to the previous year, the company maintained stable funds from operations and a consistent payout ratio, reflecting a robust operational performance amid ongoing strategic asset sales.
The most recent analyst rating on ($TSE:HR.UN) stock is a Hold with a C$11.25 price target. To see the full list of analyst forecasts on H&R Real Estate ate Staple stock, see the TSE:HR.UN Stock Forecast page.
Spark’s Take on TSE:HR.UN Stock
According to Spark, TipRanks’ AI Analyst, TSE:HR.UN is a Neutral.
H&R REIT faces significant financial challenges, with declining income and increasing leverage. However, its strategic repositioning towards growth-oriented assets, such as residential and industrial properties, offers some optimism for future performance. The valuation is mixed, with a high dividend yield counterbalancing profitability concerns. Technical indicators suggest neutral momentum, while recent corporate events and earnings call highlight both positive trends in certain segments and ongoing challenges.
To see Spark’s full report on TSE:HR.UN stock, click here.
DividendsBusiness Operations and StrategyFinancial Disclosures
H&R REIT Schedules Q1 2025 Earnings Release and Declares April Distribution
Positive
Apr 15, 2025
H&R Real Estate Investment Trust announced the release of its first quarter 2025 financial results scheduled for May 14, 2025, followed by a conference call on May 15, 2025. The company also declared a distribution for April 2025, reflecting its ongoing commitment to providing value to unitholders. This announcement underscores H&R’s strategic focus on residential and industrial properties, as it continues to streamline operations and divest from office and retail assets to enhance its market positioning.
Spark’s Take on TSE:HR.UN Stock
According to Spark, TipRanks’ AI Analyst, TSE:HR.UN is a Neutral.
H&R Real Estate Staple faces significant financial challenges, with declining income and increasing leverage. However, positive technical indicators and strategic repositioning towards growth-oriented assets offer some optimism. The valuation is mixed, with a high dividend yield counterbalancing profitability concerns. The earnings call and corporate events suggest a strategic shift that could benefit future performance.
To see Spark’s full report on TSE:HR.UN stock, click here.
DividendsBusiness Operations and Strategy
H&R REIT Announces March 2025 Distribution Amid Strategic Shift
Positive
Mar 17, 2025
H&R Real Estate Investment Trust has declared a monthly distribution of $0.05 per unit for March 2025, with an annualized distribution of $0.60. The distribution is scheduled for April 15, 2025, with a record date of March 31, 2025. This announcement aligns with H&R’s strategic focus on residential and industrial properties, as the company continues to streamline its operations by selling off office and retail properties. This move is part of H&R’s broader strategy to enhance its market position and create long-term value for its stakeholders.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.