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Scentre Group SCG

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Stock XASX Rating as of
A$3.53 +0.05 (1.44%)
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Scentre's Premium Retail Shopping Centers Well-Placed to Withstand Lower Consumer Confidence

Yingqi Tan

In the face of rising threats from e-commerce, Scentre Group’s tenant mix is evolving. The worst affected of all is department stores, which now account for less than 16% of the group's total retail floorspace, versus 21% a decade ago. Over time, Scentre has been replacing shrinking department stores with experience-based retail that can only be consumed on-site. Scentre also focuses on creating reasons for customers to visit and stay for longer. Examples include themed events featuring Disney characters and live music. These moves ensure Westfield centers continue to draw immense foot traffic, amid structural online headwinds.

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Price vs Fair Value

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SCG is trading at a LOCK|^@NF premium.
Price
A$3.53
Fair Value
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Uncertainty
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1-Star Price
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5-Star Price
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Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Scentre has several mixed-use development opportunities on existing assets. Adding high-density residential apartments to the shopping centers should, in turn, benefit retail sales.

Bears

Scentre’s occupancy cost is already higher than that of comparable peers. There is a limit to how much higher the rent can increase if retail sales are moderating.

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Trading Information

Previous Close Price
A$3.48
Day Range
A$3.47–3.56
52-Week Range
A$3.28–4.27
Bid/Ask
A$3.52 / A$3.53
Shares Outstanding
5.23B
Market Cap
A$18.46B
Volume/Avg
8M / 11M

Key Statistics

Price/Earnings (Normalized)
13.01
Price/Sales
7.08
Dividend Yield (Trailing)
5.13%
Dividend Yield (Forward)
5.22%
Dividend Payment Schedule
Feb, Aug
Total Yield
5.13%

Company Profile

Scentre Group owns the largest premium shopping center portfolio in Australia and New Zealand, operating 42 Westfield malls. This includes seven of the top 10 malls in Australia by sales turnover and four of the top five in New Zealand. Westfield centers are typically one-stop shopping destinations, each with a comprehensive range of retail, service, lifestyle, and entertainment offerings. About half the retail floorspace is leased to anchor tenants, and half to specialty tenants. The vast majority of Scentre’s income is derived from rents. The group also earns small management fees for managing properties and development projects on behalf of capital partners.
Sector
Real Estate
Industry
REIT - Retail
Stock Style Box
Large Value
Total Number of Employees
3,129
Website
https://www.scentregroup.com

Competitors

Valuation

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Metric
SCG
MGR
VCX
Price/Earnings (Normalized)
 13.0111.6412.49
Price/Book Value
 0.940.770.91
Price/Sales
 7.082.768.04
Price/Cash Flow
 16.018.2116.28
Price/Earnings
SCG
MGR
VCX

Financial Strength

Metric
SCG
MGR
VCX
Quick Ratio
 0.170.270.20
Current Ratio
 0.260.840.42
Interest Coverage
 2.813.646.08
Quick Ratio
SCG
MGR
VCX

Profitability

Metric
SCG
MGR
VCX
Return on Assets (Normalized)
 5.62%4.02%8.26%
Return on Equity (Normalized)
 10.54%6.48%11.97%
Return on Invested Capital (Normalized)
 5.77%4.07%8.38%
Return on Assets
SCG
MGR
VCX

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Capital Allocation
Economic Moat
Market Cap
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LOCK|dT#?wH>LOCK|s&!$69B
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LOCK|Jp%&?N@pLOCK|^M$54B
 Kimco Realty Corp
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LOCK|W#@r?zgLOCK|lP$16B
 Unibail-Rodamco-Westfield ADR
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—LOCK|sQf$15B
 Unibail-Rodamco-Westfield Act. SIIC ET STES FONC.EUROP.
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—LOCK|vsY$15B
 CapitaLand Integrated Commercial Trust
CPAMF
—LOCK|lQS@d$14B
 Regency Centers Corp
REG
LOCK|stKl!dLOCK|RK$14B
 Scentre Group
STGPF
—LOCK|Mn#z?$13B
 Federal Realty Investment Trust
FRT
LOCK|?ynb%$v$LOCK|^wH$9B
 Macerich Co
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LOCK|DKq<^CBLOCK|bWd$7B

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