NXRT. 4 minute glance.....
Price / FFO is good $30.78 / 2.7 = 11.4
The div is 6.5%.
but debt is ridiculously high at 1500 debt / 790 mkt cap = 2.0
How to think about the debt level?
The debt is why the price seems low.
I was thinking -- maybe consider this -- for a company with too high debt, how much would they have to cut the dividend and for how long in order to get the debt down to an industry normal level?
MAA CPT UDR have debt / mkt cap of 0.3 to 0.4
NXRT:
debt $1,500,000,000
should be 300,000,000 = 300/790 = 0.38 debt / mkt cap.
shares 25,600,000
div per share 2.04 annual
= $52 million per year div cost.
reduce debt by 1,200,000,000 over 10 years to get to 300,000,000
$120,000,000 per year debt reduction > 2x the annual dividend.
or cut the dividend to zero for 20 years. ??
check my numbers.
Not sure if this method means anything, expect stay away from this one. |
