Artis Real Estate Investment Trust (AX.UN.TO)

They are adding to their U.S. assets. He's owned this in the past, but sold it when oil was over $100 years ago. Has a $14 target and likes Artis.

Haven’t looked at it for 2 years. REIT sector hasn’t had great tailwinds, with rates going up. But now REITs have outperformed the TSX. Artis reissued securities, has assets in the US. Balance sheet getting a bit better, solid management. But company is unfocussed. Other REITs are doing better. Struggling to find its identity. Avoid it.

This started as a Western Canadian focused REIT and has expanded into the US. Their payout ratio is a little higher than others, but overtime this is an investment that will pay well and he has faith they will work to lower the leverage on the balance sheet. Yield 8.4%.

The chart is acting well. It needs to rise above $14, and he's concerned about its volumes. It looks blah, waiting for some news. You could own it.

He's owned this in the past, but sold it a few years ago because of its Alberta exposure. Now, he's starting to warm up to it. If Alberta comes back, this will do well. He's looking at it, but wouldn't but it yet. A hold.

This missed their last quarter, which was weak, partially due to climbing interest rates. He has owned this on and off, not now. They have exposure out west, but are deciding what to do with those properties. This is difficult to own. It pays a high, sustainable yield. He plays defence in REITs, given rising rates and the lingering Amazon issue. Artis is too problematic now.

They have expanded into some US markets and it has done well. It trades at a discount to other REITs and he likes owning it here.

This company is trading at a great cash flow multiple. Although they have exposure in Alberta, he believes the dividend is safe and you should see a 5% capital appreciation annually as well. Yield 7.9%. (Analysts’ price target is $13.90 )

Are the dividends safe? Artis has been getting out of their Alberta holdings. The management is good, but it still trades at a premium. He thinks they have good assets in Minnesota to offset their Alberta holdings. It still is too focused out west and is a proxy for the western market with higher vacancy rates and lower oil prices. There are better companies that are not too concentrated on interest rates. The industrial REIT sector has outperformed, for example.

Has been hit because of their overexposure to Alberta. Announced they are going to sell a lot of their Alberta properties, and get more focused in the US. This is transforming the company into being better. There is still a headwind because of their office exposure in Alberta. He isn’t overly negative, but wouldn’t step in yet.

Was expensive at 13-14 times to AFFO, and traded at a premium to its BV. Got hit with Calgary and over exposure to Alberta. They are reducing their Alberta office space. Industrial and retail seem to be doing all right. They are trying to grow their US asset base, and have new properties in Houston and Phoenix. About 40% of their assets are now in the US. However, in the last 3 months, the US$ has gone down. They are trying to reinvigorate their company, because they got caught.

Has a very small position in this, and wouldn’t be one of his Top picks right now. They are somewhat challenged in that they derive about 13% of their Net Operating Income from offices in Calgary. We are going to see a significant increase in office supply, with a good chunk happening in Calgary. Rents are trending lower which is bad news for this company. Feels the dividend should be relatively sustainable, and he can’t foresee any balance sheet issues. If you want a yield with a little more risk associated to it, you could hold onto this.

Everyone expected that the Minnesota and Houston assets to outperform, but their Alberta assets got hit really hard when oil prices dropped. They are planning to sell some of their US assets. Good management. In office and retail, not only do you have to deal with Alberta’s slowing economy, but you are dealing with headwinds coming from retail.

Preferreds. The common stocks have done very well lately. They expanded into the US at the right time, which has helped provide stability. The common stock is yielding about 8%, and you may find by switching from the preferreds to the common, you get a similar yield plus upside, as opposed to the preferred which will be capped. You might want to talk to a financial advisor as some of the tax treatment might be different.

Well-managed. Its properties are pretty decent. Retail REITs are not performing as well, so he prefers more diversified REITs. The yield is north of 8%.