Mirvac Group Is an Australian Property Group with operations across the property investment, development, and retail services landscape. Shares dived rapidly during the COVID pandemic, however have since shot up a massive 38% this year. We take a look and see, Should I Buy Mirvac Group Shares?

Mirvac Group Shares Price

MGR shares fell as low as $1.95 during the COVID pandemic, and have the 52-week range of $2.01 – $3.05, the market cap currently sits at $11.7 billion.

Should I Buy Mirvac Group, Mirvac Group shares price, MGR ASX, Mirvac shares
Mirvac Group Share Price

About MGR Shares

Mirvac Group (ASX:MGR) is a diversified Australian Property company, with an integrated development and asset management capabilities. The Company has business in Office and Industrial, Retail, Residential and Corporate developments.

Should I Buy Mirvac: Dividend History

Mirvac typically pays a dividend twice yearly, usually around August or March. The dividend yield of Mirvac has been relatively stable for some time. The dividend for Mirvac has typically been increasing year on year except for the suspension during COVID. As of 1H2021, the dividend payment has been resumed.

Mirvac Groups shares are typically 0% franked meaning that they do not come with associated franking credits applied. At the current share price, they currently yield of 3.2%.

Mirvac Group Dividend History (Cents Left Axis)

Should I Buy Mirvac Group Fundamentals

The latest earnings-related announcement comes from the group 3Q21 Operational Update and Earnings Upgrade, which was released to the market on the 28th of April 2021. In the update, the company mentions the relatively positive performance of the business leading into the final quarter.

“During the quarter, our business has performed well and has strong momentum leading into the final quarter with rent collection rates improving, and residential settlements and sales ahead of expectations. The residential business, with 1,791 settlements in the financial year to date, positions Mirvac to comfortably exceed guidance of over 2,200 lot settlements in FY21.”

Mirvac’s CEO & Managing Director, Susan Lloyd-Hurwitz

The Company issued profit guidance for the Full year to at least 13.7cents / share which is up about 5% from the previous low range estimate of 13.1cps. The company also flagged an increase to the FY21 dividend up to 9.9cps.

The company also flag that Retail Sales have been improving since the pandemic lows in June 2020

Should I Buy Mirvac Group, Mirvac Group shares price, MGR ASX, Mirvac shares
Retail Sales, Comparable Centers QoQ Growth (Source: Market Update)

Financials ASX:MGR

From the 1H21 Financial results released to the market in December 2020, the group reported growth in Operating EBIT up 10% on 2H20 to $276million.

Should I Buy Mirvac Group, Mirvac Group shares price, MGR ASX, Mirvac shares
Source: Mirvac 1H21 Results presentation released to the Market

This provides positive re-assurances around the COVID recovery of the business, especially around the retail business which is up 44% over the Half Year.

The Company also flag a massive $28billion dollar development pipeline to 2025.

Income Statement

In the 1H21 report Mirvac reported revenues of $346.5 million which is slightly lower than the 1H19 report. The group also reported a Profit Before Income Tax of $351.5million.

Should I Buy Mirvac Group, Mirvac Group shares price, MGR ASX, Mirvac shares
Mirvac Group 1H21 Income Statement

The key metrics since 2017 – 2020 have remained relatively stable, with operating and net income affected in the FY2020 report, however still relatively strong given the circumstances.

Despite the disruption, Mirvac’s FY20 financial metrics are a testament to the strong balance sheet with which we entered the crisis, but also the agility and resilience the team showed in responding to it.

Mirvac FY2020 Report.

The company also mentioned in their FY20 report that Mirvac is positioned to rebound quickly from the crisis and continue to deliver for our security holders.

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Mirvac Group Income Balance Sheet

The group as of 31 December had $43.9million of cash and cash equivalents on the Balance Sheet, this is up from June 2020. Total Net Assets are up slightly to $8.93million.

Mirvac Group 1H21 Balance Sheet

Mirvac Shares Ownership

We can see from the below that Mirvac Group Shares are majority-owned by the General Public and Institutions at 57.8% and 42% respectively. This is a common theme amongst large historic blue-chip companies.

Should I Buy Mirvac Group, Mirvac Group shares price, MGR ASX, Mirvac shares
Mirvac Group Share Ownership Structure

The substantial holders are Vanguard and Blackrock, again this is seen in many of our blue-chip companies;

NameSharesCurrent Value
The Vanguard Group, Inc.415,601,897A$1.2b
BlackRock, Inc.243,081,048A$719.5m
Mirvac Group Substantial Holders

Mirvac Group is currently #41 on the ASX200

Should I Buy Mirvac Group: Prophet’s Take

Mirvac Group may be, in our opinion, one of the best value plays in the Australian Real Estate Sector. Mirvac offer’s one of the most attractive dividend payout ratio and yields in the sector. The dividend payout has been typically increasing YoY and the dividend payouts are well covered by earnings.

Independent Non-Executive Directors of the company such as Jane Hewitt and Christine Bartlett have been recently buying up shares on market over the previous 12-months for a total of $88,200 on market. This seems to signal they are confident in the companies future plans.

With the economy returning to pre-pandemic levels we see Mirvac as a good quality play in the Australian Real-Estate space. Whilst we don’t currently hold any MGR:ASX we indirectly do this through our involvement in Vanguard Australian Shares INDEX ETF (ASX:VAS) Share Price – Market Index.

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