Interent continues upwards and to the Right
Financial Performance
All measurements of financial performance were improved over Q2 2017.Net operating income at $20 million was 25% above Q2 2017.The fair value gain on investment properties was $52 million as the cap rate decreased from 4.50% to 4.46%.While net income showed a gain of 40% to $57 million.And more importantly adjusted funds from operations (AFFO) increased by 27% and fully diluted AFFO per unit (e.p.s) increased by 8%.
Future Growth
5 year price performance of IIP.UN
The best indicator of e.p.s is adjusted funds from operations (AFFO) and it increased by 28% and 8% on a per share basis.This blog sees a continuation of this trend in the third and fourth quarter.As subsequent to this quarter IIP completed a public offering of 11 million shares at $10.65 per share for proceeds of $115 million.And it will be used for new acquisitions.These increases in equity have allowed their debt to GBV ratio to drop from 48% to 43.5%. And in this quarter it bought 62 suites in Hamilton.Interent's earnings
have moved very quickly and has left it's price behind.Although it's price has increased, IIP's P/E ratio is about the lowest on the TSX index.Certainly it may be the lowest of the reits at 5.15.Comparable sized reits have a P/E ratio of 13 to 15.So there is ample room for IIP.UN to move to the $15-$16 price range. without a dividend increase.Let me be clear this stock is the cheapest stock on the TSX with a market capitalization over $1 billion.
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