Slate Grocery REIT (SGR.UN) AI Stock Analysis

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Slate Grocery REIT

(TSX:SGR.UN)

84Outperform

Slate Grocery REIT demonstrates solid financial health with strong revenue growth and robust cash flow generation. The positive technical indicators and a stable valuation with a high dividend yield are favorable. The optimistic earnings call further enhances its prospects, solidifying the company's position in the retail REIT sector. While liabilities need monitoring, the ability to capitalize on market conditions and strategic management decisions supports a strong overall stock performance.

Slate Grocery REIT (SGR.UN) vs. S&P 500 (SPY)

Market Cap

C$858.55M

Dividend Yield8.23%

Average Volume (3M)113.28K

Price to Earnings (P/E)16.1

Beta (1Y)0.97

Revenue Growth3.90%

EPS Growth8.72%

CountryCA

EmployeesN/A

SectorReal Estate

Sector Strength81

IndustryREIT - Retail

Share Statistics

EPS (TTM)0.30

Shares Outstanding59,009,000

10 Day Avg. Volume110,100

30 Day Avg. Volume113,275

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap3.19

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit20.24

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$14.29

Price Target Upside-2.32% Downside

Rating ConsensusHold

Number of Analyst Covering2

Slate Grocery REIT Business Overview & Revenue Model

Company DescriptionSlate Grocery REIT is an owner and operator of U.S. grocery-anchored real estate. The REIT owns and operates approximately U.S. $1.3 billion of critical real estate infrastructure across major U.S. metro markets that communities rely upon for their everyday needs. The REIT's resilient grocery-anchored portfolio and strong credit tenants provide unitholders with durable cash flows and the potential for capital appreciation over the longer term.

How the Company Makes MoneySlate Grocery REIT makes money primarily through leasing its properties to tenants, with a significant focus on grocery-anchored real estate. The majority of their revenue comes from rental income generated by long-term leases with grocery stores and other essential service retailers that are typically less sensitive to economic cycles. Additionally, the company may benefit from property appreciation and strategic sales of assets within its portfolio. Slate Grocery REIT's earnings are supported by its focus on properties that provide stable cash flows through essential retail services, enhanced by potential partnerships with large national grocery chains and continued expansion in high-demand markets.

Slate Grocery REIT Financial Statement Overview

Summary

Slate Grocery REIT shows strong revenue growth and effective cost management, resulting in healthy margins. While the balance sheet indicates balanced leverage, liabilities require careful monitoring. Cash flow generation is robust, though strategic cash management remains crucial. The company is well-positioned within the REIT industry, but ongoing attention to profitability and debt management is needed.

Income Statement

Very Positive

Slate Grocery REIT has shown consistent revenue growth over the years, with a noticeable increase from 2021 to 2024. The gross profit margin is strong, indicating effective management of costs relative to revenue. However, the net profit margin, while positive, reflects a moderate level of profitability, suggesting room for improvement in controlling other operational expenses. The EBITDA margin is robust, highlighting the company's ability to generate earnings before accounting for interest, taxes, depreciation, and amortization.

Balance Sheet

Positive

The balance sheet of Slate Grocery REIT presents a moderate debt-to-equity ratio, indicative of a balanced leverage strategy. However, the return on equity has shown variability, suggesting fluctuating efficiency in generating profits from shareholders' equity. The equity ratio is relatively stable, signifying a solid capital structure. Nevertheless, the company’s total liabilities are substantial, which could pose risks if not managed properly.

Cash Flow

Positive

The cash flow statements reveal a positive trend in free cash flow, reflecting the company's capacity to generate cash after capital expenditures. The operating cash flow to net income ratio indicates solid cash conversion, enhancing financial flexibility. However, fluctuations in financing and investing cash flows suggest potential volatility in cash management strategies.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
209.13M	203.28M	177.49M	138.28M	126.13M
	Gross Profit
135.40M	130.47M	127.41M	100.86M	91.50M
	EBIT
0.00	124.88M	49.83M	60.52M	58.99M
	EBITDA
128.47M	86.77M	140.66M	104.87M	77.40M
	Net Income Common Stockholders
39.67M	13.60M	128.80M	90.87M	41.26M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
22.67M	23.59M	20.39M	14.04M	2.36M
	Total Assets
2.23B	2.24B	2.27B	1.74B	1.32B
	Total Debt
1.17B	1.16B	1.13B	937.74M	726.37M
	Net Debt
1.14B	1.14B	1.11B	923.71M	724.01M
	Total Liabilities
1.38B	1.37B	1.34B	1.11B	870.84M
	Stockholders Equity
673.47M	687.44M	740.51M	619.02M	452.72M
Cash Flow		Free Cash Flow
67.04M	71.78M	51.95M	46.12M	36.61M
	Operating Cash Flow
70.97M	76.30M	58.99M	50.80M	39.35M
	Investing Cash Flow
-10.43M	-20.55M	-381.74M	-190.85M	5.79M
	Financing Cash Flow
-61.46M	-52.55M	329.11M	151.72M	-45.19M

Slate Grocery REIT Technical Analysis

Technical Analysis Sentiment

Positive

Last Price14.63

Price Trends

50DMA

13.85

Positive

100DMA

13.68

Positive

200DMA

13.25

Positive

Market Momentum

MACD

0.23

Negative

RSI

66.69

Neutral

STOCH

92.96

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SGR.UN, the sentiment is Positive. The current price of 14.63 is above the 20-day moving average (MA) of 13.94, above the 50-day MA of 13.85, and above the 200-day MA of 13.25, indicating a bullish trend. The MACD of 0.23 indicates Negative momentum. The RSI at 66.69 is Neutral, neither overbought nor oversold. The STOCH value of 92.96 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:SGR.UN.

Slate Grocery REIT Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SGR.UN	84 Outperform	C$858.55M	16.09	5.85%	8.23%	3.90%	8.72%
MRG.UN	75 Outperform	C$923.94M	8.17	5.83%	4.30%	3.85%	-31.81%
PLZ.UN	74 Outperform	C$413.54M	16.67	4.57%	7.42%	6.36%	13.91%
DRM	69 Neutral	C$769.83M	4.14	12.93%	3.38%	61.39%	―
HOM.UN	65 Neutral	C$994.76M	―	-5.69%	4.14%	2.02%	80.16%
Sector *	60 Neutral	$2.81B	11.04	0.20%	8508.34%	6.12%	-16.66%

* Real Estate Sector Average

Performance Comparison

TSE:SGR.UN

Slate Grocery REIT

14.63

4.66

46.74%

TSE:DRM

DREAM Un Cl A

18.10

0.38

2.14%

TSE:MRG.UN

Morguard NA REIT UN

17.40

1.89

12.19%

TSE:PLZ.UN

Plaza Retail REIT

3.77

0.46

13.90%

ARESF

Artis Real Estate Investment

5.13

0.79

18.20%

TSE:HOM.UN

BSR Real Estate Investment Trust

18.41

3.52

23.64%

Slate Grocery REIT Earnings Call Summary

Earnings Call Date:May 05, 2025

(Q1-2025)

% Change Since: 2.96%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Positive

The earnings call for Slate Grocery REIT's Q1 2025 was predominantly positive, with significant achievements in leasing volumes, rental spreads, and net operating income growth. The REIT's stable occupancy and proactive debt management further bolster its position. Although there was a temporary setback due to a tenant bankruptcy, it is viewed as an opportunity to capture higher market rents. Overall, the favorable market conditions and strategic management decisions outweigh the minor challenges faced.

Q1-2025 Updates

Positive Updates

Record Leasing Volumes and Rental Spreads

Slate Grocery REIT completed over 220,000 square feet of total leasing in Q1 2025, with renewal spreads reaching a record high of 17% above expiring rents and new deals completed at over 22% above comparable average in-place rents.

Increase in Net Operating Income

Adjusting for completed redevelopments, same-property net operating income increased by $6.8 million or 4.3% on a trailing 12-month basis.

Stable Portfolio Occupancy

Portfolio occupancy remained stable at 94.4%, with average in-place rent at $12.72 per square foot, significantly below the market average of $23.85 per square foot.

Debt Management

Slate Grocery REIT has only $179 million of debt maturing in 2025, representing less than 13% of the total debt. Post-quarter end, $17 million of debt was financed at attractive terms, with positive discussions underway for the remaining 2025 debt maturities.

Favorable Market Conditions

High construction costs and tight lending conditions limit new retail development, reinforcing the value of existing centers and providing a favorable environment for rent increases.

Negative Updates

Mid-Valley Mall Bankruptcy Impact

Occupancy dipped due to a bankruptcy at Mid-Valley Mall, where a tenant, Big Lots, vacated. However, this provides an opportunity to re-lease the space at higher market rents.

Company Guidance

During the Slate Grocery REIT Q1 2025 conference call, the management provided optimistic guidance, highlighting robust leasing performance with double-digit rental spreads contributing to a 4.3% increase in same-property net operating income, equivalent to $6.8 million on a trailing 12-month basis. Leasing activity was strong, with over 220,000 square feet completed, and renewal spreads achieved a record high of 17% above expiring rents, while new deals were 22% above comparable in-place rents. Portfolio occupancy was stable at 94.4%, and the average rent of $12.72 per square foot remains significantly below the market average of $23.85, indicating potential for further rent increases. The REIT has only $179 million of debt maturing in 2025, constituting less than 13% of total debt, and productive refinancing discussions are underway. The management expressed confidence in the grocery-anchored sector's resilience amidst economic uncertainties, citing limited new retail development and high construction costs as factors bolstering the value of existing well-located centers. They also noted that recent tenant bankruptcies are creating opportunities to mark spaces to market, potentially yielding higher rents. Overall, the management remains positive about the REIT's growth prospects and its ability to generate long-term value for unitholders.

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.