Top 3 Canadian REITs with Reasonable Valuations

The Canadian REITs on our list could represent good value compared with its peers

SmallCapPower | August 6, 2020: REITs, or Real Estate Investment Trusts, have become popular with income investors in recent years due to their higher-than-average yields, compared with most dividend stocks, and generally stable cash flow. Today we have found three top Canadian REITs with price-to-book ratios of 1.5 or less, as well as price-to-earnings ratios that are less than the average P/E of both the S&P 500 and S&P/TSX Composite Index.

*Returns are based on closing stock prices as of August 5, 2020

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Northview Apartment Real Estate Investment Trust (TSX:NVU.UN) – $34.92
Northview Apartment REIT is one of Canada’s largest publicly-traded, multi-family REITs with a portfolio of approximately 27,000 residential units and 1.2 million square feet of commercial space in more than 60 markets across eight provinces and two territories. During Q1 2020, the Company reported diluted FFO of $0.47 per unit, up from $0.45 during the same period last year. NVU.UN has a current dividend yield of 4.7%.

  • One-Year Return: 40%

Granite Real Estate Investment Trust (TSX:GRT.UN) – $79.26
Granite Real Estate Investment Trust is a Canada-based REIT engaged in the acquisition, development, ownership, and management of industrial, warehouse, and logistics properties in North America and Europe. Granite owns over 90 investment properties, representing approximately 40.3 million square feet of leasable area. On June 9, 2020, the Company announced that it had agreed to acquire eight income-producing properties in the United States comprising approximately 4.0 million square feet at a combined purchase price of about C$332 million. GRT.UN has a current dividend yield of 3.7%.

  • One-Year Return: 39%

Dream Industrial REIT (TSX:DIR.UN) – $11.07
Dream Industrial REIT owns and operates a portfolio of 262 industrial properties, comprising approximately 25.8 million square feet of gross leasable area in key markets across North America and a growing presence in European industrial markets. During the second quarter 2020, Dream Industrial entered into more 60 leases totalling 0.9 million square feet, with just 3% of the Trust’s portfolio gross leasable area is set to mature during the remainder of the year. DIR.UN has a current dividend yield of 6.3%.

  • One-Year Return: 3%

Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.

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