Cominar Real Estate Inv Tr (CUF.UN.TO) Buy,…

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Cominar Real Estate Inv Tr (CUF.UN.TO)

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11.74

-0.00 (0.00%)

as of Mar 2, 2022, 9:00:00 pm Market Open.

139 watching

COMMENT

The Quebec real estate market is solid and that is being notice by US investors. Management has to work through some issues. Not his favorite name, but it gives access to the Quebec market.

WEAK BUY

Series of disappointments. High leverage. Good news is asset sales are progressing, and nice growth. Cheap. Distribution is now safe after the cut. Not the highest quality REIT. Reasonable at these levels.

BUY

It's Quebec-focused in retail and some industrial. They cut their dividend two years ago due to the soft Alberta market. They've done well re-positioning the portfolio and pays a high 5.7% yield. This will do well in the coming 5 years. REITs are split between industrial (e-commerce) which offers strong growth vs. retail which pays higher dividends. Do you want income or growth? He holds six REITs across the spectrum for the income.

COMMENT

If a recession is imminent, wouldn't own this name. Cleaned up the portfolio. Pure play on the Quebec economy, which is quite strong. Own office, industrial, retail. A show me story. Cut distribution, changes in management, sold assets. Retail quite weak. Office and industrial OK. Leverage quite high at 55%. An apartment REIT or a seniors housing name would be safer.

COMMENT

They've disappointed for a long, long time. Won't see growth until 2020. He sees 1.8% AFFO growth. The balance sheet still carries a little more debt than it should. There are better opportunities out there. If they continue to execute, this should be better in coming years.

DON'T BUY

A company that was under stressed. It was over levered. It starting to restructure. It had a couple of Target and Sears properties. They had to cut their distributions. They brought new Management. He would say it is cheap but stay away from it. It's tough.

BUY

Real estate is mostly in Quebec, a stable market, and Montreal is seeing an uptick. They own shopping meals. He likes it. Great dividend. They have new and better management.

BUY

It was cheap a few years ago and really cheap now. He's frustrated with it, though the current earnings forecast holds great potential.

HOLD

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%.

WEAK BUY

Heartbreaking story. Haven’t been as aggressive on asset sales, balance sheet not great. Model negative growth of -3.8%. Sowing seeds for growth, and if that’s the case, you can own it here. Trading at 11.3x. Wouldn’t be his first go-to, but OK at these levels.

SHORT

He likes REITs where he is looking from yield perspective but he does not like the price momentum on this one so it is a small short. It has a low return on equity.

PAST TOP PICK

(Past Top Pick, Sept. 1, 2017, Down 3%) A REIT in Quebec which is enjoying one of the strongest economies in Canada. He's confident about real estate going forward. It's selling at a discount to book value. Good geography. What's not to like?

COMMENT

They've misallocated capital in the past and for years he had a sell signal. Now, he's not sure. But new board members are stellar, so we'll see positive change here. It could be a long road to get the company going again. Your risk to the
downside is lower now than a year ago.

PAST TOP PICK

(A Top Pick Sep. 1/17, Down 6%) It had a nice yield but lost some altitude. Mall REITs have been doing this because of the AMZN-Q tsunami of the retail industry. They are mostly in Quebec now and it is the strongest province we have right now. CUF.UN-T is trading at a nice discount to book value. He is staying with it.

DON'T BUY

It missed its last report. It holds a lot in tier-2 malls. They're over-leveraged. They're re-structuring everything. Their chart is terrible. They're dealing with a lot of issues. Yes, it's cheap, but suffers from bad execution. They failed to expand and acquire properly. It's going nowhere.

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Cominar Real Estate Inv Tr (CUF.UN.TO)