The Israel Land Development Co. Ltd. – Value Analysis (TEL AVIV:ILDC) : December 28, 2017

Capitalcube gives The Israel Land Development Co. Ltd. a score of 36.

Our analysis is based on comparing The Israel Land Development Co. Ltd. with the following peers – B. Gaon Holdings Ltd and Castro Model Ltd. (GAON-IL and CAST-IL).

Investment Outlook

The Israel Land Development Co. Ltd. has a fundamental score of 36 and has a relative valuation of OVERVALUED.

Fundamental Score

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Company Overview

  • Compared to peers, relative outperformance over the last year has faded more recently.
  • It’s current Price/Book of 0.82 is about median in its peer group.
  • The market expects faster earnings growth from ILDC-IL than from its peers and also a turnaround in its current ROE.
  • ILDC-IL employs relatively high amounts of assets while generating relatively median profit margins.
  • Changes in annual earnings are in line with its chosen peers but lags in terms of revenue, implying the company is cost conscious and selective about spending for growth.
  • Over the last five years, ILDC-IL‘s return on assets has declined from about median to less than the median among its peers suggesting that the company’s historical competitiveness in operations is slipping away.
  • While ILDC-IL‘s revenues growth has been around the peer median in recent years, the market seems to see faster growth ahead and gives its shares a higher than peer median P/E ratio.
  • The company’s capital investment seems appropriate for a business with peer median returns.
  • ILDC-IL seems too levered to raise additional debt.

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Leverage & Liquidity

ILDC-IL would seem to have a hard time raising additional debt.

  • With debt at a relatively high 68.95% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 60.40%), and relatively tight interest coverage level of 0.98x, ILDC-IL would have a hard time raising much additional debt. The company has a Constrained profile in terms of its ability to take on further debt.
  • All 2 peers for the company have an outstanding debt balance.

ILDC-IL has maintained its Limited Flexibility profile from the recent year-end.

  • ILDC-IL‘s interest coverage is greater than (but within one standard deviation of) its five-year average interest coverage of 0.38x.
  • Compared to 2016, interest coverage has remained relatively stable for both the company (0.98x) and the peer median (0.98x).
  • ILDC-IL‘s debt-EV is its lowest relative to the last five years and compares to a high of 85.84% in 2012.
  • While its debt-EV decreased to 68.95% from 78.72% (in 2016), its peer median increased during this period to 60.40% from 55.57%.
  • Relative to peers, debt-EV fell 14.61 percentage points.

Access the detailed analysis for The Israel Land Development Co. Ltd.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
B. Gaon Holdings Ltd 60.4 2.41 0.46 9.71
Castro Model Ltd. 41.2 2.48 3.6 28.19
Israel Land Development Co. Ltd. 68.95 0.85 0.98 -0.77
Peer Median 60.4 2.41 0.98 9.71
Best In Class 41.2 2.48 3.6 28.19

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Company Profile

The Israel Land Development Co. Ltd. provides property development services. It operates through the following business segments: Yielding Property-Property Leasing; Construction and Development; Gas and Energy; Billboards, and Hotels. The Yielding Property-Property Leasing segment engages in leasing and management of properties in Israel and Poland. The Construction and Development segment engages in initiation, development, construction and execution of residential construction projects. The Gas and Energy segment engages in oil and gas exploration. The Billboards segment engages in selling advertising through billboards Services. The Hotels segment engages in ownership and management of a chain of hotels across the country. The company was founded in 1909 and is headquartered in Bnei Brak, Israel.


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