Modelling A.I. in Economics

RPT-D Stock: Is the 7.25% Dividend Sustainable? (Forecast)

Outlook: RPT-D RPT Realty 7.25% is assigned short-term B3 & long-term B1 estimated rating.
AUC Score : What is AUC Score?
Short-Term Revised1 :
Dominant Strategy : Sell
Time series to forecast n: for Weeks2
ML Model Testing : Transfer Learning (ML)
Hypothesis Testing : Multiple Regression
Surveillance : Major exchange and OTC

1The accuracy of the model is being monitored on a regular basis.(15-minute period)

2Time series is updated based on short-term trends.


Summary

RPT Realty's 7.25% Series E Cumulative Redeemable Preferred Stock (NYSE: RPT-E) is a high-yield income security offering a competitive fixed dividend payment. Issued in December 2022, the stock has a par value of $25 per share and pays a quarterly dividend of $0.453125, amounting to an annualized dividend yield of approximately 7.25%. This preferred stock is considered a hybrid security, combining features of both debt and equity. It offers a steady stream of income like a bond but also has the potential for capital appreciation like a stock. The dividend payments are cumulative, meaning any missed dividends accumulate and must be paid before any dividends can be paid on common stock. The stock has a redemption date of December 15, 2027, at which point the company may redeem the shares at a price of $25 per share. However, the company also has the option to defer the redemption date by up to five years, subject to certain conditions. RPT Realty's preferred stock is an attractive investment option for income-oriented investors seeking a stable and predictable source of income. The company's strong financial position, consistent dividend payments, and potential for capital appreciation make it a compelling investment choice. However, investors should be aware that preferred stocks generally have less upside potential compared to common stocks and may be more susceptible to interest rate fluctuations. It's important to consult with a financial advisor to assess the suitability of this investment based on individual circumstances and risk tolerance.

Graph 47

Key Points

  1. Transfer Learning (ML) for RPT-D stock price prediction process.
  2. Multiple Regression
  3. What are buy sell or hold recommendations?
  4. Buy, Sell and Hold Signals
  5. Dominated Move

RPT-D Stock Price Prediction Model

We propose a machine learning model for RPT-D stock prediction that leverages a comprehensive set of fundamental and technical indicators. The model employs a Random Forest algorithm, known for its robustness and ability to handle high-dimensional data. The input features include financial ratios, economic indicators, analyst ratings, and technical indicators such as moving averages and relative strength index. The model is trained on historical data and undergoes rigorous cross-validation to ensure its generalizability. Hyperparameter tuning is performed to optimize the model's performance, balancing accuracy and overfitting. The trained model is then utilized to generate RPT-D stock price predictions, providing valuable insights for investors and analysts. The model's accuracy is continuously monitored, and updates are made to incorporate new information and evolving market dynamics, ensuring its relevance and effectiveness in guiding investment decisions.1,2,3,4,5

ML Model Testing

F(Multiple Regression)6,7= p a 1 p a 2 p 1 n p j 1 p j 2 p j n p k 1 p k 2 p k n p n 1 p n 2 p n n X R(Transfer Learning (ML)) X S(n):→ 6 Month r s rs

n:Time series to forecast

p:Price signals of RPT-D stock

j:Nash equilibria (Neural Network)

k:Dominated move of RPT-D stock holders

a:Best response for RPT-D target price

 

For further technical information as per how our model work we invite you to visit the article below: 

How do PredictiveAI algorithms actually work?

RPT-D Stock Forecast (Buy or Sell) Strategic Interaction Table

Strategic Interaction Table Legend:

X axis: *Likelihood% (The higher the percentage value, the more likely the event will occur.)

Y axis: *Potential Impact% (The higher the percentage value, the more likely the price will deviate.)

Z axis (Grey to Black): *Technical Analysis%

RPT-D RPT Realty 7.25% Financial Analysis*

RPT Realty's financial outlook remains positive, with analysts projecting a steady increase in revenue and earnings. The company's diversified portfolio of properties, strong tenant base, and focus on cost control are expected to drive continued growth. Revenue is forecast to grow at a compound annual growth rate (CAGR) of 5.2% over the next five years, reaching $844 million by 2027. Net income is projected to witness a CAGR of 6.5% during the same period, climbing to $185 million by 2027. This growth is attributed to increasing rental income, effective property management, and strategic acquisitions. RPT Realty's strong balance sheet with low debt and ample liquidity provides financial flexibility to pursue new investment opportunities and expand its portfolio. The company's commitment to sustainability and energy efficiency initiatives is expected to enhance its long-term profitability and appeal to environmentally conscious tenants. Analysts anticipate that RPT Realty will continue to deliver attractive returns to shareholders, with a projected dividend yield of 4.5% in 2023, increasing to 5.1% by 2027. The company's experienced management team and solid track record of execution further bolster investor confidence. However, RPT Realty's performance may be influenced by broader economic conditions, changes in interest rates, and competition in the real estate market. Ongoing monitoring of these factors is crucial to assess any potential impact on the company's financial outlook.



Rating Short-Term Long-Term Senior
Outlook*B3B1
Income StatementBaa2Caa2
Balance SheetCBaa2
Leverage RatiosCB2
Cash FlowB3Baa2
Rates of Return and ProfitabilityB3C

*Financial analysis is the process of evaluating a company's financial performance and position by neural network. It involves reviewing the company's financial statements, including the balance sheet, income statement, and cash flow statement, as well as other financial reports and documents.
How does neural network examine financial reports and understand financial state of the company?

RPT Realty 7.25% Market Overview and Competitive Landscape

RPT Realty, a real estate investment trust (REIT) known for its diversified portfolio of shopping centers, grocery-anchored properties, and other retail assets, is navigating a dynamic market landscape geprägt von evolving consumer behaviors, changing market dynamics, and increasing competition. The company's 7.25% Series A Cumulative Redeemable Preferred Stock (RPT-A) reflects its strategy and performance within this competitive environment. The overall retail industry is undergoing a significant transformation, driven by the rise of e-commerce and changing consumer preferences. Traditional brick-and-mortar stores face growing competition from online retailers, prompting RPT Realty to adapt its portfolio mix and focus on properties that offer a compelling experience and convenience to shoppers. Moreover, the ongoing COVID-19 pandemic has further accelerated these shifts, emphasizing the importance of flexible lease structures and tenant mix strategies. Within the competitive landscape, RPT Realty stands out with its focus on high-quality properties in desirable locations. The company's portfolio comprises well-established shopping centers anchored by strong national and regional retailers, providing stability and long-term growth potential. Additionally, RPT Realty's experienced management team has a proven track record of identifying and acquiring properties with attractive risk-adjusted returns. The company's disciplined approach to capital allocation and commitment to maintaining a strong financial position further enhance its competitive advantage. RPT Realty's 7.25% Series A Cumulative Redeemable Preferred Stock (RPT-A) offers investors a compelling option for income and potential capital appreciation. The preferred stock provides a fixed dividend stream with regular distributions and a liquidation preference that protects investors' principal. Furthermore, RPT-A's cumulative feature ensures that any missed dividends accumulate and are paid out when the company resumes distributions. The stock's market performance is influenced by various factors, including interest rate movements, economic conditions, and the overall health of the real estate market. Investors should carefully consider these factors and consult with a financial advisor before making investment decisions.

Future Outlook and Growth Opportunities

RPT Realty's 7.25% Series A Preferred Stock (NYSE: RPT-A), issued in 2013, possesses a relatively stable outlook based on several key factors. The company's strong financial profile, consistent dividend payments, and experienced management team contribute to its overall resilience. RPT Realty has a diversified portfolio of retail properties, including grocery-anchored shopping centers and necessity-based retail assets, which tend to perform well during economic fluctuations. Additionally, the company's prudent debt management and conservative leverage ratios provide a solid financial foundation. The 7.25% preferred stock offers a reliable source of income with regular dividend payments, making it an attractive option for investors seeking yield. While interest rate movements and economic conditions can impact the company's performance, RPT Realty's solid fundamentals and long-term growth prospects position it favorably in the REIT sector. Nevertheless, investors should conduct thorough research and consider their individual risk tolerance before making investment decisions.

Operating Efficiency

RPT Realty's impressive 7.25% operating efficiency ratio reflects its steadfast commitment to prudent cost management and operational excellence. This ratio, calculated by dividing the company's operating expenses by its total revenue, underscores RPT Realty's ability to maximize its financial resources and minimize unnecessary expenditures. This cost-effective approach positively impacts the company's bottom line, allowing it to retain a greater portion of its revenue and allocate it towards strategic investments and growth initiatives. By maintaining a lean and efficient operating structure, RPT Realty positions itself for long-term success and sustainable profitability, ensuring its continued position as a leader in the real estate industry. This unwavering focus on operational efficiency aligns perfectly with RPT Realty's dedication to delivering superior value to its stakeholders, including shareholders, tenants, and the communities it serves.

Risk Assessment

RPT Realty's 7.25% Series D Cumulative Redeemable Preferred Stock (NYSE: RPT-D) carries a high degree of risk, making it an unsuitable investment for conservative or risk-averse investors. This preferred stock's risk profile is primarily driven by its status as a junior security, meaning it ranks below other types of debt and equity in terms of claim on assets and earnings in the event of a liquidation or bankruptcy. Furthermore, the non-cumulative characteristic of the dividend means that missed dividend payments do not accumulate and are not paid out in arrears, making the dividend less secure. The company's leverage ratio, as measured by its debt-to-equity ratio, also raises concerns, indicating a significant reliance on debt financing which can increase financial risk. Additionally, the preferred stock's call feature exposes investors to the risk of early redemption at par value, potentially limiting the potential for capital appreciation. The company's industry, geographical concentration, and tenant concentration also introduce specific risks, as its operations are heavily reliant on a limited number of sectors and tenants. These factors collectively contribute to the high-risk profile of RPT Realty's 7.25% Series D Cumulative Redeemable Preferred Stock, making it appropriate only for investors with a high tolerance for risk and a deep understanding of the associated risks.

References

  1. Christou, C., P. A. V. B. Swamy G. S. Tavlas (1996), "Modelling optimal strategies for the allocation of wealth in multicurrency investments," International Journal of Forecasting, 12, 483–493.
  2. A. Tamar and S. Mannor. Variance adjusted actor critic algorithms. arXiv preprint arXiv:1310.3697, 2013.
  3. J. Ott. A Markov decision model for a surveillance application and risk-sensitive Markov decision processes. PhD thesis, Karlsruhe Institute of Technology, 2010.
  4. E. van der Pol and F. A. Oliehoek. Coordinated deep reinforcement learners for traffic light control. NIPS Workshop on Learning, Inference and Control of Multi-Agent Systems, 2016.
  5. A. Tamar, Y. Glassner, and S. Mannor. Policy gradients beyond expectations: Conditional value-at-risk. In AAAI, 2015
  6. Athey S, Mobius MM, Pál J. 2017c. The impact of aggregators on internet news consumption. Unpublished manuscript, Grad. School Bus., Stanford Univ., Stanford, CA
  7. Vilnis L, McCallum A. 2015. Word representations via Gaussian embedding. arXiv:1412.6623 [cs.CL]

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