Parent Capital Corp V.PAR.H

Price Target $4 to $4.50 with possible dividend growth

[YieldChaser]

Using the just published quarterly data and an apparently sustainable distribution of 25 cents a $4.50 price target is realistic. Of concern is the poor debt coverage and 5% same asset NOI decrease. As such it remains a high risk REIT with far too many assets in secondary and teriary locations but it appears they have turned the corner. A buy when they have at least a flat same asset NOI. At $4 it seems fairly priced but could go up to $4.50, and not down in my earlier somewhat gloomier blog entries.

Using their published quarterly NOI of $8.5M or $34M annualized and roughly $386M in total debt and 26.4M shares outstanding I arrive at the following share values using CAP ranges from 5% to 7%. If you believe, like me, that these are teriary assets and a 7% CAP range is appropriate then stock is in the high $3 range like today. If you think, like StockEditor that these are primo assets and a 6% CAP rate is warranted then he sees $7 as realistic.

I think a yield of 7% to 8% is appropriate for this risky REIT and that implies a mid $3 price range but they could increase their distribution. So $4-4.50 seems about right, given that same asset NOI is still falling.