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Ingenia Communities Group INA

Morningstar Rating
A$5.23 +0.13 (2.55%)
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Company Report

Ingenia Earnings: Strong Result Amid Boomtime for Landlords; Valuation Up 10%

We raise our fair value estimate for no-moat Ingenia by 10% to AUD 4.30 with half-year earnings, mainly driven by higher assumed rental growth. Ingenia achieved impressive 9% rent increases on its lifestyle sites over the half. We still expect a fade, assuming rent growth moderates to 2.3% by the end of our 10-year discrete forecast period. But strong current rental growth forms a higher base for rental income than can be maintained, given Ingenia’s relative affordability versus traditional housing. This accounts for the vast majority of our valuation increase.

Price vs Fair Value

INA is trading at a 18% premium.
Price
A$5.08
Fair Value
A$9.80
Uncertainty
Medium
1-Star Price
A$2.23
5-Star Price
A$2.84
Economic Moat
Zsdkq
Capital Allocation
Xvlpymxpl

Bulls Say, Bears Say

Bulls

The aging population and increasing cost of living provide high demand for affordable retirement housing.

Bears

Competition in the land-lease space means the firm must pay up for high-value land.

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Trading Information

Previous Close Price
A$5.10
Day Range
A$5.095.27
52-Week Range
A$3.565.28
Bid/Ask
A$5.14 / A$5.30
Market Cap
A$2.13 Bil
Volume/Avg
941,402 / 967,316

Key Statistics

Price/Earnings (Normalized)
24.85
Price/Sales
5.08
Dividend Yield (Trailing)
2.10%
Dividend Yield (Forward)
2.10%
Total Yield
2.10%

Company Profile

Ingenia Communities is an Australian real estate investment trust with a property portfolio capitalizing on tourism, retirement, and low-cost housing needs. The largest and fastest growing source of income is the firm’s land-lease communities targeted at the over-55s population. This business generates development income on houses and rental income from the land. Additional rental and fee income are generated from housing communities and holiday parks. The firm’s assets are situated in Australia’s eastern states, with a focus on coastal and outer metropolitan regions.
Sector
Real Estate
Industry
REIT - Residential
Stock Style Box
Small Core
Total Number of Employees

Competitors

Valuation

Metric
INA
ELS
SUI
Price/Earnings (Normalized)
24.8537.2668.70
Price/Book Value
1.378.392.22
Price/Sales
5.088.954.92
Price/Cash Flow
26.6121.6616.72
Price/Earnings
INA
ELS
SUI

Financial Strength

Metric
INA
ELS
SUI
Quick Ratio
0.310.090.18
Current Ratio
1.190.130.26
Interest Coverage
4.263.340.20
Quick Ratio
INA
ELS
SUI

Profitability

Metric
INA
ELS
SUI
Return on Assets (Normalized)
3.97%6.18%2.00%
Return on Equity (Normalized)
6.08%23.96%4.54%
Return on Invested Capital (Normalized)
4.00%8.90%4.07%
Return on Assets
INA
ELS
SUI
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REIT - Residential Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
AVB
AvalonBay Communities IncCpstzhcngQzkr$26.1 Bil
EQR
Equity ResidentialPxcgysjBprlz$23.7 Bil
INVH
Invitation Homes IncGphpnjcqLvq$21.4 Bil
SUI
Sun Communities IncFztstsmhbCqh$15.7 Bil
ESS
Essex Property Trust IncXyplgqvpRwvn$15.5 Bil
MAA
Mid-America Apartment Communities IncCjh$15.3 Bil
AMH
American Homes 4 Rent Class ANmwr$13.3 Bil
UDR
UDR IncDvfm$12.2 Bil
ELS
Equity Lifestyle Properties IncXgkjclnfqSrhy$12.0 Bil
AIRC
Apartment Income REIT Corp Class AGbbwglqdSqsfj$4.6 Bil

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