Opinions Andy Nasr
Artis Real Estate Investment TrustAX.UN.TOCOMMENTSep 08, 2015
Andy NasrStock price when the opinion was issued
As of Feb 03, 2026. Market Open.
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Diversified with office, retail, industrial in both Canada and US. Institutional investors tend not to like diversified REITs. Over their skis on the balance sheet, so forced to sell assets and a lot of the best ones. Has become more of an office REIT in challenged markets.
When REITs come back into favour, this won't be leading the parade. Best move on and deploy capital into one of the other suggestions from today.
Their office holdings will be in a tough spot, but their industrial ones are doing very well and will continue to. NAV is $14-15, but shares are only at $6. So, management will have to work hard to prove to investors that there's a lot more value here. Don't buy until you see that plan.
Turnaround situation that got caught in a rising interest rate environment. Still likes it and is buying for new clients. Essentially, a creeping takeover. More upside than downside. Don't sell now, lots of positive catalysts.
Chris BlumasTempting. You'd get a yield of about 8% until the end of September, and 7.25% after that unless they call it back. You could buy a 5-year GIC in a registered account, no risk, and a yield of 5.32%. Or buy a laddered group of preferreds with about 6%.
Pretty indebted, not the best credit rating, fairly illiquid. If he's going to take the risk, he really wants the reward. He doesn't love either, but the AX.UN common shares with a yield of 8.34% are a better bet right now.
Most unloved asset class. Don't throw in the towel. 1/3 of business is owned by insiders. Immense pressure to be privatized, which often carries a 20-30% premium to share price. He's dollar-cost averaged down.
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Premium content
Premium contentPremium contentBased in Winnipeg, this REIT owns property in Manitoba, BC, Arizona, Colorado, Minnesota and Wisconsin, broken down into 47% office, 32% industrial and 20% retail. Before you get alarmed over the office and retail holdings, consider Artis' 6.92x PE, 6.35% dividend yield based on a 43.8% payout ratio, and 6.5x cash flow, as Stockchaser Michael O'Reilly notes. In fact, the forward PE is 11.51x, so the market has faith in this name, even though mixed REITs have fallen out of fashion in this post-Covid world.
Thinks the yield is very sustainable. Payout ratio is well below 80%. This is a name you can buy and hope to see dividend growth out of, provided you get some cooperation out of the Western Canadian economy. Office exposure in Alberta represents about 20% of their NOI, so it is not that significant. However, it is B and C type quality office exposure, and there are going to be some concerns about their ability to sustain high occupancy and rent growth. The positive is that they have significant US exposure, which accounts for about 25% of their operating income. Yield of just under 9%.