Last update on 2024-06-07

Kimco Realty (KIM) - Piotroski F-Score Analysis for Year 2023 (Final Score: 6/9)

Analyze Kimco Realty (KIM) 2023 Piotroski F-Score: 6/9. Learn about profitability, liquidity, and efficiency insights.

Short Analysis - Piotroski Score: 6

We're running Kimco Realty (KIM) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Kimco Realty (KIM) has a Piotroski F-Score of 6 based on the analysis of various financial criteria. The company's net income is positive, indicating profitability. Their cash flow from operations is also positive and greater than net income, showcasing strong cash generation and financial health. The company's return on assets (ROA) has improved, indicating better profitability relative to its asset base. However, there's an increase in financial leverage, which raises some concerns about debt levels. Despite this, their current ratio has grown, demonstrating good liquidity. However, the number of shares has slightly increased, causing minor ownership dilution. Lastly, while the asset turnover ratio has improved, the gross margin has slightly declined.

Insights for Value Investors Seeking Stable Income

Considering the positive aspects like strong profitability, cash flow generation, improved ROA, and good liquidity, Kimco Realty (KIM) appears to be a reasonably solid investment option. However, the increased debt leverage and slight gross margin decline should be monitored. For potential investors, it could be worthwhile to look into Kimco Realty but with a watchful eye on leverage and potential dilution impacts.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Kimco Realty (KIM)

Company has a positive net income?

Analyzing whether the net income is positive or negative is crucial in Piotroski analysis.

Kimco Realty's net income for 2023 stands at $654,273,000, which is indeed positive. This indicates profitability and earnings generated in the year under review. A positive net income suggests financial health and adds 1 point to the Piotroski score. Historically, Kimco Realty has managed to maintain positive net income almost every year except for a loss in 2009. This recent performance aligns well within their historical context and signifies continued strength and potential reliability for investors.

Company has a positive cash flow?

Cash Flow from Operations (CFO) refers to the cash a company generates from its normal business operations. It is essential for valuation and liquidity analysis.

For Kimco Realty (KIM), the CFO for 2023 stands at $1,071,607,000, indicating a positive cash flow from operations. This trend adds 1 point to the Piotroski F-Score. Over the last 20 years, the trend of operating cash flow has shown growth with minor dips, demonstrating robust operational efficiency. Such a position significantly strengthens the balance sheet and indicates robust liquidity and operational performance. Notably, the increase from $861,114,000 in 2022 to $1,071,607,000 in 2023 marks a substantial improvement, reinforcing investor confidence.

Return on Assets (ROA) are growing?

The criterion for "Change in Return on Assets (ROA)" is to assess if a company's profitability, in terms of its asset base, has improved year over year.

In 2023, Kimco Realty (KIM) demonstrated a flagship improvement in its ROA, advancing to 0.0362 from 0.0069 in 2022. This amplified return indicates a potent enhancement in the company's profitability relative to its asset base. Analyzing this within a broader temporal lens, the trend spans two decades, showcasing Kimco’s historical operating cash flow and how it evolved from $308.6 million in 2003 to a remarkable $1.071 billion in 2023. Notably, the fluctuation of the industry median ROA over the same period has experienced minor variations, consistently orbiting around the 0.70 mark. Kimco’s substantial hike in ROA, albeit still under the industry median, delineates a positive profitability trajectory. Therefore, fulfilling this criteria grants Kimco an added point, underlining a commendable operational upturn.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income: Operating cash flow should exceed net income as it's a sign of quality earnings. Higher operating cash flow indicates that the company can generate ample cash to sustain operations, signaling financial health and robustness.

Kimco Realty's operating cash flow for 2023 stands at $1,071,607,000, whereas its net income is $654,273,000. Given that the operating cash flow exceeds the net income, this criterion scores a point. Such a trend is positive as it highlights Kimco Realty's strong cash generation capabilities and effective earnings quality. Over the past two decades, the company has consistently seen fluctuations, particularly noticeable in the years 2008 and 2020, reflecting economic impacts. However, a significant upward trend in operating cash flow since 2021 indicates a post-pandemic recovery and strategic financial management.

Liquidity of Kimco Realty (KIM)

Leverage is declining?

Change in Leverage compares the firm's financial leverage over time to assess improvements or deteriorations in financial health.

In 2022, Kimco Realty's leverage was 0.4079, while in 2023 it increased to 0.4228. This shows a negative trend as leverage has indeed risen. A higher leverage indicates that the company is financing more assets through debt compared to equity, which can imply higher risk. Historically, their leverage has fluctuated, peaking in recent years at 0.4918 in 2019 and bottoming out at 0.3033 in 2010. With an increase for 2023, the financial risk is elevated, scoring 0 points in Piotroski criteria.

Current Ratio is growing?

The current ratio measures a company's ability to cover its short-term liabilities with its short-term assets.

Kimco Realty's current ratio has increased from 4.9347 in 2022 to 6.416 in 2023, indicating an improvement in the company's liquidity position. This marks a significant improvement, suggesting better short-term financial health and increased capacity to cover short-term obligations. Furthermore, Kimco's current ratio far exceeds the industry median of 1.1846 for 2023, demonstrating its superior liquidity relative to peers. Over the last 20 years, Kimco's current ratio has generally been above the industry median, with notable peaks in 2020 (8.0317) and high variability throughout the years.

Number of shares not diluted?

Change in shares outstanding measures whether the number of shares has increased or decreased, affecting ownership dilution.

Kimco Realty (KIM) experienced an increase in outstanding shares from 615,528,000 in 2022 to 616,947,000 in 2023. According to the Piotroski framework, this results in no added points (0 points) for the firm in this specific criterion. This trend signifies a minor dilution of ownership for existing shareholders, which might be perceived negatively from an investor's standpoint due to potential dilution of earnings per share (EPS). Reviewing the historical data for the past 20 years shows a general upward trend: from 217,879,389 in 2003 to 616,947,000 in 2023, highlighting an expanding share base. This expansion trend emphasizes the firm's strategy towards raising capital through additional equity issuance, which may be essential for its growth, but it nearly consistently has diluted existing shareholders.

Operating of Kimco Realty (KIM)

Cross Margin is growing?

Gross Margin refers to the proportion of revenue that exceeds the cost of goods sold, and is vital as it indicates a company's financial health.

Kimco Realty's Gross Margin for 2023 is 0.6878, a slight decrease from 0.6927 in 2022. Hence, no point should be awarded here. Such a trend could raise concerns, especially when comparing with the industry median for 2023, which stands at 0.7072. A gross margin decline might suggest increased costs or pricing pressures.

Asset Turnover Ratio is growing?

The asset turnover ratio measures the efficiency of a company's use of its assets to generate sales.

The asset turnover ratio of Kimco Realty increased from 0.0952 in 2022 to 0.0988 in 2023. This small yet positive increase indicates that Kimco Realty has become more efficient in using its assets to generate revenue over the past year. Given the context of the last 20 years, the asset turnover ratio had seen fluctuations but achieving an increase in the current period is significant and earns a score of 1 point. This trend, reflecting an uptick in operational efficiency relative to asset utilization, is a positive sign.