Opinions
Robert Lauzon
Cominar Real Estate Inv Tr
CUF.UN-T
HOLD
Oct 03, 2018
$11.540
Stock price when the opinion was issued
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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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There has been some management turnaround resulting in the selling of assets and a reduction in the dividend. The Quebec economy is doing well. He likes that it is trading below NAV, but it will take some time to get back to full value. He would suggest diversifying with some other REITs. Yield 6.2%.