Saturday, April 25, 2020
Unibail Rodamco Westfield 2019 "EBITDAC"
The valuation above ignores Coronavirus. (Not quite EBITDAC: Earnings Before Interest, Taxes, Depreciation, Amoritisation and Corona :) but close.
Unibail Rodamco merged with Westfield and financed the deal by selling 38? million shares, so the share count has increased from 100m to roughly 140m. I haven't seen the balance sheet or P&L since the merger / stapling? of stocks.
The business is retail real estate so investors might be afraid of the long-term results... In the short term (March, April, May...June?, July? etc? 2020) the Coronavirus is a disaster.
Interestly the company sold EUR 1,4b of 5 and 10 year bonds at 2,1% and 2,6% interest at the beginning of April 2020.
Usually, the Benjamin Graham number is the geometric average of 15x Earnings and 1,5x book value. For real estate 1,5x book might lead to a too high valuation so I have used 1x book.
Graham Number = 260 Euro = Square Root ( 15 x 25 EPS x 1 x Book 200 )
Dividend = 5,4 / 50 = 10,4%.
Conclusion 2018: As of November 2018 Unibail Rodamco Westfield looks like a buy. Not my circle of competence. (Oops).
Conclusion 2020: April 2020 looks like a buy, but I don't know whether life is going to return to normal and how quickly.