Opinions
Dennis Mitchell, CFA
Cominar Real Estate Inv Tr
CUF.UN-T
PAST TOP PICK
Aug 02, 2013
$20.090
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BUY
Quebec's biggest REIT and once a darling REIT. But they had a lot of dilutive raises which increased leverage and bloated their portfolio. Also, the dividend is too high and will likely get cut. Last year, activists forced the company to change at the board level and cut the dividend (and needs yet another cut). The payout ratio is now much better and they've hired a new CFO who should do a fine job. Now, they are considering what to do with Gare Central in Quebec City, and this may benefit shareholders. A good time to buy.
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DON'T BUY
A play on Quebec. Announced a strategic review, so potential for some sort of activity. She prefers to own a pure industrial. Summit, for example, has Montreal exposure. Retail is going to face significant challenges to creating a path to growth. Third distribution cut since 2017. Better opportunities elsewhere.
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(A Top Pick August 20/12. Down 13.56%.) Sold off in sympathy with the rest of the REIT universe. Sold his holdings. Doubled the size of the REIT in the last 3 years but cash flow per unit growth has been constrained by their balance sheet. Have now de-levered and secured an investment grade credit rating so they will get rid of the convertibles and add more secured debentures which will improve their cost of capital. Still a good quality name.