Opinions
Derek Warren
BTB Real Estate Investment Trust
BTB.UN-T
DON'T BUY
Jul 15, 2014
$4.610
Stock price when the opinion was issued
income trust
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SELL
He recently got out about three months ago. They bought is in 2012 at much lower levels. Their assets are focused in Eastern Ontario and Quebec. He feels they are over distributing -- over 100% payout. That is okay for while, but it is not sustainable. Industry wide payouts are down to 80%. Their properties are getting better with some recent selling of non-core assets. They yield may be vulnerable. He would be a seller.
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COMMENT
Dividend safe? He owned BTB.UN a few years ago as they held light industrial and commercial real estate around Montreal. The issue going back 3-4 years ago was they had issues meeting financial metrics, which he feels was due to them over distributing earnings. He would prefer to hold WPT and GRT.UN.
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HOLD
Quebec focused small cap REIT. You have to have a thesis on Quebec and the growth prospects for their economy. But post-election things are looking quite stable. They are trying to reduce their leverage, but raised their dividend recently. He likes the former, but not the latter when they have a high payout ratio. Thinks the dividend is safe, but they will get less institutional buy in.