American Realty Investors, Inc. (ARL) | Investment Case

1. Company Snapshot

1.a. Company Description

American Realty Investors, Inc., together with its subsidiaries, acquires, develops, and owns multifamily apartment communities and commercial real estate properties in the southwestern, southeastern, and mid-western United States.The company leases apartment units to residents; and leases office, industrial, and retail space to various for-profit businesses, as well as local, state, and federal agencies; and sells land and properties.As of December 31, 2021, its portfolio included five commercial properties comprising four office buildings and one retail properties; nine multifamily apartment communities consisting of 1,492 units; and fifty-two multifamily apartment communities totaling 10,281 units.

The company also owns or controls 1,886 acres of developed and undeveloped land.American Realty Investors, Inc.was founded in 1999 and is headquartered in Dallas, Texas.

Show Full description

1.b. Last Insights on ARL

American Realty Investors, Inc.'s recent performance was driven by a significant 157% year-over-year jump in Q2 EPS. The company's net income attributable to common shares surged to $2.8 million, or $0.18 per diluted share, from $1.2 million, or $0.07 per diluted share, in the same period last year. A notable increase in occupancy rates, with total occupancy at 82%, including 94% at multifamily properties, contributed to the improved earnings. This uptick in occupancy, particularly in the multifamily segment, signals a positive trend in the company's operational performance.

1.c. Company Highlights

Last Price	15.33
Change Percentage	-1.29%
Open	15.33
Previous Close	15.53
Market Cap ( Millions)	248
Volume	155
Year High	18
Year Low	9.43
M A 50	15.76
M A 200	14.25

FCF Yield	-7.32%
Dividend Yield	0.00%
ROE	0.90%
Debt / Equity	0.00%
Net Debt / EBIDTA	-206.13%
Price To Book	0.41
Price Earnings Ratio	45.52
Price To FCF	-13.66
Price To sales	5.05
EV / EBITDA	40.61

2. Transcript Summary

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3. NewsRoom

American Realty Investors, Inc. Reports Earnings for Quarter Ended September 30, 2025

Nov -06

Source: businesswire.com

American Realty Investors, Inc. reports Earnings for Quarter Ended June 30, 2025

Aug -07

Source: businesswire.com

American Realty (ARL) Q2 EPS Jumps 157%

Aug -07

Source: fool.com

American Realty Investors, Inc. Reports Earnings for Quarter Ended March 31, 2025

May -08

Source: businesswire.com

American Realty Investors, Inc. Reports Earnings for Quarter Ended December 31, 2024

Mar -20

Source: businesswire.com

American Realty Investors, Inc. Reports Earnings for Quarter Ended September 30, 2024

Nov -07

Source: businesswire.com

American Realty Investors, Inc. Reports Earnings for Quarter Ended June 30, 2024

Aug -08

Source: businesswire.com

Pillar Income Asset Management Announces Appointment of Erik Johnson as President and Chief Executive Officer

May -29

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.80%)

6. Segments

Residential

Expected Growth: 4.5%

Residential segment growth of 4.5% driven by increasing demand for single-family homes, low mortgage rates, and government incentives for first-time homebuyers. Additionally, American Realty Investors, Inc.'s strategic expansion into high-growth markets and focus on affordable housing options contribute to the segment's growth.

Commercial

Expected Growth: 5.5%

American Realty Investors, Inc.'s commercial segment growth of 5.5% is driven by increasing demand for industrial and logistics spaces, e-commerce growth, and strategic acquisitions. Additionally, the company's focus on value-add opportunities, rent growth, and effective cost management contribute to its growth momentum.

7. Detailed Products

Apartment Communities

American Realty Investors, Inc. owns and operates a diverse portfolio of apartment communities, offering a range of floor plans and amenities to suit different lifestyles and budgets.

Commercial Properties

The company's commercial portfolio includes office buildings, retail centers, and industrial properties, providing tenants with flexible lease options and prime locations.

Land Development

American Realty Investors, Inc. acquires and develops raw land for future development, creating opportunities for residential and commercial growth.

Property Management

The company offers comprehensive property management services, including leasing, maintenance, and financial management, to maximize property value and income.

Investment and Advisory Services

American Realty Investors, Inc. provides investment and advisory services, including market analysis, due diligence, and transaction management, to help clients achieve their real estate goals.

8. American Realty Investors, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for American Realty Investors, Inc. is medium because while there are some alternatives to real estate investment trusts (REITs), they are not perfect substitutes. For example, investors could invest in other asset classes such as stocks or bonds, but they may not offer the same income and diversification benefits as REITs.

Bargaining Power Of Customers

The bargaining power of customers for American Realty Investors, Inc. is low because individual investors and institutions have limited negotiating power when it comes to the prices of REIT shares. Additionally, the company's diversified portfolio and strong brand reputation reduce the bargaining power of customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers for American Realty Investors, Inc. is medium because while the company has some negotiating power when it comes to property acquisitions and management contracts, suppliers such as property managers and contractors still have some bargaining power due to their specialized expertise and limited availability.

Threat Of New Entrants

The threat of new entrants for American Realty Investors, Inc. is low because of the significant barriers to entry in the REIT industry, including the need for large amounts of capital, specialized expertise, and a strong brand reputation. Additionally, the company's established relationships with investors, tenants, and suppliers make it difficult for new entrants to compete.

Intensity Of Rivalry

The intensity of rivalry for American Realty Investors, Inc. is high because the REIT industry is highly competitive, with many established players competing for investors, tenants, and properties. The company must continually innovate and improve its operations to maintain its market share and competitive advantage.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	22.84%
Debt Cost	6.64%
Equity Weight	77.16%
Equity Cost	7.75%
WACC	7.50%
Leverage	29.61%

11. Quality Control: American Realty Investors, Inc. passed 3 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Five Point Holdings

A-Score: 5.4/10

Value: 7.3

Growth: 7.0

Quality: 5.9

Yield: 0.0

Momentum: 8.5

Volatility: 3.7

1-Year Total Return ->

Belpointe PREP

A-Score: 4.5/10

Value: 7.6

Growth: 3.4

Quality: 3.2

Yield: 0.0

Momentum: 5.0

Volatility: 7.7

1-Year Total Return ->

American Realty Investors

A-Score: 4.3/10

Value: 8.2

Growth: 3.8

Quality: 4.8

Yield: 0.0

Momentum: 6.0

Volatility: 3.0

1-Year Total Return ->

Anywhere Real Estate

A-Score: 3.9/10

Value: 8.1

Growth: 1.8

Quality: 2.9

Yield: 0.0

Momentum: 9.5

Volatility: 1.3

1-Year Total Return ->

Seritage Growth Properties

A-Score: 3.5/10

Value: 7.6

Growth: 1.8

Quality: 3.3

Yield: 0.0

Momentum: 4.5

Volatility: 4.0

1-Year Total Return ->

Comstock

A-Score: 3.3/10

Value: 7.4

Growth: 4.9

Quality: 4.8

Yield: 0.0

Momentum: 2.5

Volatility: 0.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

31.59%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.50%

American Realty Investors, Inc. - US0291741090

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on ARL

1.c. Company Highlights

Lower Yield

Lower Growth

Weak Momentum

More Volatile

Lower Quality

Stable Momentum

Cheaper

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.80%)

6. Segments

Residential

Expected Growth: 4.5%

Commercial

Expected Growth: 5.5%

7. Detailed Products

Apartment Communities

Commercial Properties

Land Development

Property Management

Investment and Advisory Services

8. American Realty Investors, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: American Realty Investors, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

15.33$

Current Price

15.33$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA