The Canadian REITs on our list have strong dividend payouts and are trading at a discount to their peers
SmallCapPower | September 28, 2017: Today we have identified four Canadian REITs (Real Estate Investment Trusts) that are trading at low Price to Funds from Operations (FFO) per unit multiples. The FFO is used to measure cash generated by REITs as an operating performance benchmark. It is calculated by adding depreciation and amortization back to earnings and removing gains on sales of assets.
Slate Retail REIT (TSX: SRT.UN) – $13.30
Slate Retail REIT (the REIT) is a Canada-based unincorporated open-ended real estate investment trust. The REIT focuses on acquiring, owning and leasing a portfolio of diversified revenue-producing commercial real estate properties in the United States with an emphasis on grocery-anchored retail properties. The REIT owns approximately 66 grocery anchored retail commercial properties located in the United States comprising over 7.6 million square feet of gross leasable area (GLA). The REIT’s properties are located in approximately 20 states with a presence in over 20 metropolitan statistical areas (MSAs).
- Market Cap: $573 million
- Price / Funds from Operations Per Share: 8.61x
- YTD Price PCT Change: -11.6%
- Dividend Yield: 7.4%
Slate Office REIT (TSX: SOT.UN) – $8.03
Slate Office REIT, formerly FAM Real Estate Investment Trust, is a Canada-based open-ended investment trust. The Trust focuses on acquiring, owning and leasing a portfolio of diversified revenue-producing commercial real estate properties in Canada with an emphasis on office properties. The Trust has a portfolio that spans approximately four million square feet (sq.ft.) of gross leasable area (GLA) and consists of over 30 properties located across Canada. The Trust has approximately six non-office properties.
- Market Cap: $456 million
- Price / Funds from Operations Per Share: 9.04x
- YTD Price PCT Change: 1.6%
- Dividend Yield: 9.3%
Morguard Real Estate Investment Trust (TSX: MRT.UN) – $14.25
Morguard Real Estate Investment Trust (the Trust) is a Canada-based closed-end trust. The Trust’s objective is to accumulate a Canadian portfolio of real estate assets and then manage the portfolio to generate steady, dependable returns to unitholders. It owns a real estate portfolio of approximately 50 commercial properties consisting of approximately nine million square feet of gross leasable area located in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Quebec. The retail portfolio includes two categories of properties: enclosed full-scale, regional shopping centers that are dominant in their respective markets, and neighborhood and community shopping centers that are primarily anchored by food retailers, discount department stores and banking institutions.
- Market Cap: $864 million
- Price / Funds from Operations Per Share: 9.12x
- YTD Price PCT Change: -4.3%
- Dividend Yield: 6.7%
Artis Real Estate Investment Trust (TSX: AX.UN) – $ 13.25
Artis Real Estate Investment Trust (Artis) is an unincorporated closed-end real estate investment trust (REIT). The Company’s objective is to provide stable, reliable and tax efficient monthly cash distributions, as well as long-term appreciation in the value of Artis’ units. Its segments include Western Canada, which comprises British Columbia and Alberta; Central Canada, which comprises Saskatchewan and Manitoba, and Eastern Canada, which comprises Ontario. The Company’s properties are diversified across industrial, retail, and office asset classes, and geographically across western Canada, Ontario, and in select markets in the United States. Its REIT portfolio includes over 250 commercial properties totaling approximately 26.2 million square feet of gross leasable area.
- Market Cap: $1.99 billion
- Price / Funds from Operations Per Share: 9.17x
- YTD Price PCT Change: 4.3%
- Dividend Yield: 8.2%
Disclosure: Neither the author nor any of the principals at SmallCapPower, or their family members, own shares in any of the companies mentioned above.
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