The TSX-listed Canadian REITs we’ve identified have sold off recently due to weakness in the broader markets, but have an above-average yield and could be worth holding
SmallCapPower | March 10, 2020: REITs are generally sound long-term investments, as they typically offer high dividend yields plus the potential for moderate, long-term capital appreciation. Because of the strong dividend income REITs provide, they are an important investment both for retirement savers and risk-adverse investors. REITs can fuel their dividends from the stable stream of contractual rents paid by the tenants of their properties. Today we are going to look four Canadian REITs that have seen the largest share price decline in the recent market selloff. Declining share prices mean higher dividend yields, providing a potential opportunity for those with a long-term investing horizon.
*Share prices as at March 6, 2020, data obtained from S&P Capital IQ
American Hotel Income Properties REIT LP (TSX:HOT.UN) – $5.48
REITs
American Hotel Income Properties owns a portfolio of 79 select-service hotels with ~8,900 rooms located principally in secondary and tertiary U.S. markets. The REIT has strong brand partners, including Hilton Holdings, Marriott International, Wyndham Hotel Group, and InterContinental Hotels Group. AHIP is engaged in growing its portfolio of premium branded, select-service hotels in larger secondary markets that have diverse and stable demand. The REIT’s properties range from midscale to upper upscale.
- Market Cap: $428.1M
- Weekly Return: -12.2%
- YTD-Return: -22.2%
- 30-Day Return: -20.3%
- 90-Day Average Trading Volume: 164,960
- Dividend Yield: 15.9%
SmartCentres Real Estate Investment Trust (TSX:SRU.UN) – $29.32
REITs
SmartCentres owns a portfolio featuring 157 strategically-located properties in communities across the country. SmartCentres has $9.9B in assets and owns 34.1M sq. ft of income producing, value-oriented retail space, with over 98% occupancy, on 3,500 acres of owned land across Canada. SmartCentres continues to focus on enhancing the lives of Canadians by planning and developing complete, connected, mixed-use communities on its existing retail properties. SmartCentres’ intensification program is expected to produce an additional 27.3M sq. ft of space; all construction commencing within the next five years, 13.3M sq. ft of which is already underway.
- Market Cap: $4,228.7M
- Weekly Return: -1.2%
- YTD-Return: -6.1%
- 30-Day Return: -8.4%
- 90-Day Average Trading Volume: 404,620
- Dividend Yield: 6.3%
Slate Retail REIT (TSX:SRT.UN) – $12.39
REITs
Slate Retail REIT is a Canada-based trust that focuses on renting out properties, primarily to grocery stores across the United States. The Company owns and operates 84 real estate properties in 21 states that comprise ~11 million square feet. The Company’s major tenants include Walmart (NYSE:WMT), Lowe’s (NYSE:LOW) and Stop & Shop.
- Market Cap: $508.1M
- Weekly Return: -0.9%
- YTD-Return: -5.6%
- 30-Day Return: -7.9%
- 90-Day Average Trading Volume: 47,230
- Dividend Yield: 9.4%
H&R Real Estate Investment Trust (TSX:HR.UN) – $20.02
REITs
H&R REIT owns over 460 office, retail and industrial properties, including many trophy properties, comprising about 42M sq. ft in Canada and the US, with long-term leases to high-credit tenants. H&R owns $14.1B in assets and its properties are well diversified in the Office (33 properties, 10.8M sq. ft), Retail (316 properties, 13.9M sq. ft), Industrial (87 properties, 9.2M sq. ft), and Residential (24 properties, 8,334 residential units) sectors.
- Market Cap: $5,739.5M
- Weekly Return: -0.4%
- YTD-Return: -5.1%
- 30-Day Return: -6.8%
- 90-Day Average Trading Volume: 776,010
- Dividend Yield: 6.9%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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