Morningstar

Mirvac Group MGR

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Stock XASX Rating as of
A$2.20 +0.01 (0.46%)
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Company Report

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Mirvac's FVE Lowered as Headwinds Continue, but We See Solid Longer-Term Potential

Adrian Atkins,

Mirvac trades as a stapled security, comprising one share in the corporation and one unit in Mirvac Property Trust. About 80% of earnings come from a passive commercial property portfolio housed within Mirvac Property Trust. Earnings from the rent-collecting business are relatively stable and predictable, while most of the remainder comes from a residential development business that can be lucrative but volatile. Mirvac’s REIT status results in low company tax because trusts pass income and tax liabilities through to the end investor. Mirvac pays slightly more tax than some passive real estate investment trusts, because of the development business within the Mirvac corporation.

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Price vs Fair Value

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MGR is trading at a 47% premium.
Price
A$2.20
Fair Value
A$4.30
Uncertainty
Medium
1-Star Price
A$1.94
5-Star Price
A$7.12
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

High inbound migration should support Mirvac’s earnings, particularly retail rents, and residential development sales.

Bears

Mirvac has exposure to retail department stores, one of the hardest-hit segments in the entire property sector.

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Trading Information

Previous Close Price
A$2.19
Day Range
A$2.19–2.23
52-Week Range
A$1.80–2.39
Bid/Ask
A$2.20 / A$2.21
Market Cap
A$8.68 Bil
Volume/Avg
10.3 Mil / 17.5 Mil

Key Statistics

Price/Earnings (Normalized)
—
Price/Sales
2.94
Dividend Yield (Trailing)
4.77%
Dividend Yield (Forward)
5.45%
Total Yield
4.77%

Company Profile

Mirvac is one of Australia’s largest residential developers, particularly apartments. Residential development earnings are volatile, generating about a quarter of EBIT in fiscal 2024, despite requiring only about less than 20% of the group’s invested capital. Over our 10-year discrete forecast period we don't expect residential development to exceed the lofty peaks seen in 2017, when Mirvac settled 3,400 residential lots. After an expected trough in 2025 we forecast modest growth as Mirvac constructs housing into an under-supplied market. About 80% of Mirvac’s earnings come from a predictable commercial property portfolio, more than half of which is high-grade office and another fourth in retail, a small industrial portfolio, and a small but growing build-to-rent residential portfolio.
Sector
Real Estate
Industry
REIT - Diversified
Stock Style Box
Mid Value
Total Number of Employees
1,550
Website
https://www.mirvac.com

Competitors

Valuation

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Metric
MGR
SGP
DXS
Price/Earnings (Normalized)
 —22.40—
Price/Book Value
 0.931.280.80
Price/Sales
 2.944.259.27
Price/Cash Flow
 16.01111.4413.31
Price/Earnings
MGR
SGP
DXS

Financial Strength

Metric
MGR
SGP
DXS
Quick Ratio
 0.440.670.39
Current Ratio
 1.501.700.95
Interest Coverage
 −4.351.42−9.57
Quick Ratio
MGR
SGP
DXS

Profitability

Metric
MGR
SGP
DXS
Return on Assets (Normalized)
 −0.87%2.12%−7.51%
Return on Equity (Normalized)
 −1.41%3.61%−11.38%
Return on Invested Capital (Normalized)
 −1.33%1.63%−8.02%
Return on Assets
MGR
SGP
DXS

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