Intrinsic value of Urstadt Biddle Properties Cl A - UBA

Previous Close

$20.31

  Intrinsic Value

$4.08

stock screener

  Rating & Target

str. sell

-80%

  Value-price divergence*

+13%

Previous close

$20.31

 
Intrinsic value

$4.08

 
Up/down potential

-80%

 
Rating

str. sell

 
Value-price divergence*

+13%

Our model is not good at valuating stocks of financial companies, such as UBA.

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of UBA stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  1.74
  7.40
  7.16
  6.94
  6.75
  6.57
  6.42
  6.28
  6.15
  6.03
  5.93
  5.84
  5.75
  5.68
  5.61
  5.55
  5.49
  5.44
  5.40
  5.36
  5.32
  5.29
  5.26
  5.24
  5.21
  5.19
  5.17
  5.16
  5.14
  5.13
  5.11
Revenue, $m
  117
  126
  135
  144
  154
  164
  174
  185
  197
  209
  221
  234
  247
  261
  276
  291
  307
  324
  341
  360
  379
  399
  420
  442
  465
  489
  514
  541
  569
  598
  629
Variable operating expenses, $m
 
  81
  86
  92
  99
  105
  112
  119
  126
  134
  142
  150
  158
  167
  177
  187
  197
  208
  219
  231
  243
  256
  269
  283
  298
  314
  330
  347
  365
  383
  403
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  71
  81
  86
  92
  99
  105
  112
  119
  126
  134
  142
  150
  158
  167
  177
  187
  197
  208
  219
  231
  243
  256
  269
  283
  298
  314
  330
  347
  365
  383
  403
Operating income, $m
  45
  45
  48
  52
  55
  59
  63
  67
  71
  75
  79
  84
  89
  94
  99
  105
  110
  116
  123
  129
  136
  143
  151
  159
  167
  176
  185
  194
  204
  215
  226
EBITDA, $m
  68
  74
  79
  85
  90
  96
  103
  109
  116
  123
  130
  137
  145
  154
  162
  171
  181
  190
  201
  212
  223
  235
  247
  260
  273
  288
  302
  318
  334
  352
  370
Interest expense (income), $m
  13
  13
  14
  15
  16
  17
  19
  20
  21
  23
  24
  26
  27
  29
  31
  33
  35
  37
  39
  41
  44
  46
  49
  51
  54
  57
  60
  63
  67
  70
  74
Earnings before tax, $m
  35
  33
  35
  37
  39
  42
  44
  47
  49
  52
  55
  58
  61
  65
  68
  72
  76
  79
  84
  88
  93
  97
  102
  107
  113
  119
  125
  131
  138
  144
  152
Tax expense, $m
  0
  9
  9
  10
  11
  11
  12
  13
  13
  14
  15
  16
  17
  17
  18
  19
  20
  21
  23
  24
  25
  26
  28
  29
  30
  32
  34
  35
  37
  39
  41
Net income, $m
  34
  24
  25
  27
  29
  30
  32
  34
  36
  38
  40
  42
  45
  47
  50
  52
  55
  58
  61
  64
  68
  71
  75
  78
  82
  87
  91
  96
  100
  105
  111

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  7
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  931
  989
  1,060
  1,134
  1,210
  1,290
  1,373
  1,459
  1,549
  1,642
  1,739
  1,841
  1,947
  2,057
  2,173
  2,293
  2,419
  2,551
  2,689
  2,833
  2,984
  3,142
  3,307
  3,480
  3,662
  3,852
  4,051
  4,260
  4,479
  4,708
  4,949
Adjusted assets (=assets-cash), $m
  924
  989
  1,060
  1,134
  1,210
  1,290
  1,373
  1,459
  1,549
  1,642
  1,739
  1,841
  1,947
  2,057
  2,173
  2,293
  2,419
  2,551
  2,689
  2,833
  2,984
  3,142
  3,307
  3,480
  3,662
  3,852
  4,051
  4,260
  4,479
  4,708
  4,949
Revenue / Adjusted assets
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
Average production assets, $m
  804
  863
  925
  989
  1,056
  1,125
  1,197
  1,273
  1,351
  1,432
  1,517
  1,606
  1,698
  1,795
  1,895
  2,000
  2,110
  2,225
  2,345
  2,471
  2,603
  2,740
  2,885
  3,036
  3,194
  3,360
  3,533
  3,716
  3,907
  4,107
  4,317
Working capital, $m
  0
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
Total debt, $m
  281
  297
  322
  348
  375
  403
  432
  463
  494
  527
  561
  597
  634
  673
  714
  756
  801
  847
  896
  946
  999
  1,055
  1,113
  1,174
  1,238
  1,305
  1,375
  1,448
  1,526
  1,606
  1,691
Total liabilities, $m
  332
  348
  373
  399
  426
  454
  483
  514
  545
  578
  612
  648
  685
  724
  765
  807
  852
  898
  947
  997
  1,050
  1,106
  1,164
  1,225
  1,289
  1,356
  1,426
  1,499
  1,577
  1,657
  1,742
Total equity, $m
  599
  641
  687
  735
  784
  836
  890
  945
  1,004
  1,064
  1,127
  1,193
  1,262
  1,333
  1,408
  1,486
  1,568
  1,653
  1,742
  1,836
  1,934
  2,036
  2,143
  2,255
  2,373
  2,496
  2,625
  2,760
  2,902
  3,051
  3,207
Total liabilities and equity, $m
  931
  989
  1,060
  1,134
  1,210
  1,290
  1,373
  1,459
  1,549
  1,642
  1,739
  1,841
  1,947
  2,057
  2,173
  2,293
  2,420
  2,551
  2,689
  2,833
  2,984
  3,142
  3,307
  3,480
  3,662
  3,852
  4,051
  4,259
  4,479
  4,708
  4,949
Debt-to-equity ratio
  0.469
  0.460
  0.470
  0.470
  0.480
  0.480
  0.490
  0.490
  0.490
  0.500
  0.500
  0.500
  0.500
  0.500
  0.510
  0.510
  0.510
  0.510
  0.510
  0.520
  0.520
  0.520
  0.520
  0.520
  0.520
  0.520
  0.520
  0.520
  0.530
  0.530
  0.530
Adjusted equity ratio
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648
  0.648

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  34
  24
  25
  27
  29
  30
  32
  34
  36
  38
  40
  42
  45
  47
  50
  52
  55
  58
  61
  64
  68
  71
  75
  78
  82
  87
  91
  96
  100
  105
  111
Depreciation, amort., depletion, $m
  23
  29
  31
  33
  35
  38
  40
  42
  45
  48
  51
  54
  57
  60
  63
  67
  70
  74
  78
  82
  87
  91
  96
  101
  106
  112
  118
  124
  130
  137
  144
Funds from operations, $m
  61
  52
  56
  60
  64
  68
  72
  76
  81
  86
  91
  96
  101
  107
  113
  119
  125
  132
  139
  147
  154
  162
  171
  180
  189
  199
  209
  219
  231
  242
  255
Change in working capital, $m
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from operations, $m
  60
  52
  56
  60
  64
  68
  72
  76
  81
  86
  91
  96
  101
  107
  113
  119
  125
  132
  139
  146
  154
  162
  171
  179
  189
  198
  209
  219
  230
  242
  254
Maintenance CAPEX, $m
  0
  -27
  -29
  -31
  -33
  -35
  -38
  -40
  -42
  -45
  -48
  -51
  -54
  -57
  -60
  -63
  -67
  -70
  -74
  -78
  -82
  -87
  -91
  -96
  -101
  -106
  -112
  -118
  -124
  -130
  -137
New CAPEX, $m
  -59
  -60
  -62
  -64
  -67
  -69
  -72
  -75
  -78
  -81
  -85
  -89
  -92
  -96
  -101
  -105
  -110
  -115
  -120
  -126
  -132
  -138
  -144
  -151
  -158
  -166
  -174
  -182
  -191
  -200
  -210
Cash from investing activities, $m
  -80
  -87
  -91
  -95
  -100
  -104
  -110
  -115
  -120
  -126
  -133
  -140
  -146
  -153
  -161
  -168
  -177
  -185
  -194
  -204
  -214
  -225
  -235
  -247
  -259
  -272
  -286
  -300
  -315
  -330
  -347
Free cash flow, $m
  -20
  -34
  -35
  -35
  -36
  -37
  -38
  -39
  -40
  -41
  -42
  -43
  -45
  -46
  -48
  -49
  -51
  -53
  -55
  -57
  -60
  -62
  -65
  -68
  -71
  -74
  -77
  -81
  -84
  -88
  -92
Issuance/(repayment) of debt, $m
  -2
  23
  25
  26
  27
  28
  29
  30
  32
  33
  34
  36
  37
  39
  41
  42
  44
  46
  48
  51
  53
  56
  58
  61
  64
  67
  70
  74
  77
  81
  85
Issuance/(repurchase) of shares, $m
  74
  18
  21
  21
  21
  21
  21
  22
  22
  22
  23
  23
  24
  24
  25
  26
  27
  27
  28
  29
  30
  31
  32
  34
  35
  37
  38
  40
  41
  43
  45
Cash from financing (excl. dividends), $m  
  72
  41
  46
  47
  48
  49
  50
  52
  54
  55
  57
  59
  61
  63
  66
  68
  71
  73
  76
  80
  83
  87
  90
  95
  99
  104
  108
  114
  118
  124
  130
Total cash flow (excl. dividends), $m
  52
  8
  11
  11
  12
  12
  13
  13
  14
  15
  15
  16
  16
  17
  18
  19
  20
  21
  21
  22
  23
  25
  26
  27
  28
  30
  31
  33
  34
  36
  37
Retained Cash Flow (-), $m
  -58
  -42
  -46
  -48
  -50
  -52
  -54
  -56
  -58
  -61
  -63
  -66
  -69
  -72
  -75
  -78
  -82
  -85
  -89
  -93
  -98
  -102
  -107
  -112
  -118
  -123
  -129
  -135
  -142
  -149
  -156
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -34
  -35
  -36
  -38
  -39
  -41
  -42
  -44
  -46
  -48
  -50
  -52
  -54
  -57
  -59
  -62
  -65
  -68
  -71
  -74
  -78
  -81
  -85
  -89
  -94
  -98
  -103
  -108
  -113
  -119
Discount rate, %
 
  6.50
  6.83
  7.17
  7.52
  7.90
  8.30
  8.71
  9.15
  9.60
  10.08
  10.59
  11.12
  11.67
  12.26
  12.87
  13.51
  14.19
  14.90
  15.64
  16.43
  17.25
  18.11
  19.01
  19.96
  20.96
  22.01
  23.11
  24.27
  25.48
  26.75
PV of cash for distribution, $m
 
  -32
  -31
  -29
  -28
  -27
  -25
  -24
  -22
  -20
  -18
  -17
  -15
  -13
  -11
  -10
  -8
  -7
  -6
  -4
  -4
  -3
  -2
  -2
  -1
  -1
  -1
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  97.6
  95.1
  92.9
  90.8
  88.9
  87.1
  85.4
  83.8
  82.3
  80.9
  79.6
  78.3
  77.1
  76.0
  74.9
  73.8
  72.8
  71.8
  70.9
  69.9
  69.0
  68.2
  67.3
  66.5
  65.7
  64.9
  64.1
  63.3
  62.6
  61.8

Urstadt Biddle Properties Inc. is a real estate investment trust. The firm invests in the real estate markets of the United States. It engages in the ownership, operation, and redevelopment of high quality retail shopping centers predominantly located in the suburban, high demographic, high barrier to entry communities surrounding New York City. The firm was formally known as HRE Properties Inc. Urstadt Biddle Properties Inc. was founded in 1969 and is based in Greenwich, Connecticut.

FINANCIAL RATIOS  of  Urstadt Biddle Properties Cl A (UBA)

Valuation Ratios
P/E Ratio 23.4
Price to Sales 6.8
Price to Book 1.3
Price to Tangible Book
Price to Cash Flow 13.2
Price to Free Cash Flow 794.9
Growth Rates
Sales Growth Rate 1.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -56.6%
Cap. Spend. - 3 Yr. Gr. Rate 8.1%
Financial Strength
Quick Ratio 1
Current Ratio NaN
LT Debt to Equity 45.6%
Total Debt to Equity 46.9%
Interest Coverage 4
Management Effectiveness
Return On Assets 5.2%
Ret/ On Assets - 3 Yr. Avg. 7.6%
Return On Total Capital 4%
Ret/ On T. Cap. - 3 Yr. Avg. 6.5%
Return On Equity 6%
Return On Equity - 3 Yr. Avg. 9.9%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 68.4%
Gross Margin - 3 Yr. Avg. 66.4%
EBITDA Margin 60.7%
EBITDA Margin - 3 Yr. Avg. 71.7%
Operating Margin 39.3%
Oper. Margin - 3 Yr. Avg. 37.1%
Pre-Tax Margin 29.9%
Pre-Tax Margin - 3 Yr. Avg. 41.8%
Net Profit Margin 29.1%
Net Profit Margin - 3 Yr. Avg. 45.1%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 150%

UBA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the UBA stock intrinsic value calculation we used $117 million for the last fiscal year's total revenue generated by Urstadt Biddle Properties Cl A. The default revenue input number comes from 2016 income statement of Urstadt Biddle Properties Cl A. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our UBA stock valuation model: a) initial revenue growth rate of 7.4% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.5%, whose default value for UBA is calculated based on our internal credit rating of Urstadt Biddle Properties Cl A, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Urstadt Biddle Properties Cl A.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of UBA stock the variable cost ratio is equal to 64.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for UBA stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.6% for Urstadt Biddle Properties Cl A.

Corporate tax rate of 27% is the nominal tax rate for Urstadt Biddle Properties Cl A. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the UBA stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for UBA are equal to 686.8%.

Life of production assets of 34.9 years is the average useful life of capital assets used in Urstadt Biddle Properties Cl A operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for UBA is equal to 0.9%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $599 million for Urstadt Biddle Properties Cl A - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 36.7 million for Urstadt Biddle Properties Cl A is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Urstadt Biddle Properties Cl A at the current share price and the inputted number of shares is $0.7 billion.

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COMPANY NEWS

▶ Two Nigerian banks say do not owe government money   [Jul-20-17 12:36PM  Reuters]
▶ Urstadt reports 2Q results   [Jun-08-17 04:26PM  Associated Press]
▶ Urstadt Biddle reports 2Q results   [04:22PM  Associated Press]
▶ Urstadt reports 1Q results   [Mar-10-17 04:18PM  Associated Press]
Stock chart of UBA Financial statements of UBA
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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