Opinions
Michael Simpson, CFA
Cominar Real Estate Inv Tr
CUF.UN-T
COMMENT
May 31, 2017
$13.080
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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 Québec based REIT that has expanded into parts of the Maritimes and Ontario. They went on a buying spree and their debt levels went up. The investment community knew they had to raise rates. They had to raise equity, probably at lower prices than what they actually cared to. Distribution is a little high and the payout ratio is a little high, so he doesn’t own this.