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

(A Top Pick Jul 21/17, Up 0.23%) They took a write off and cleaned up their balance sheet. The last REIT that did this turned around and went up afterwards.

This is not a company he would feel comfortable owning as the dividend was recently cut – a rare occurrence in the REIT space. This REIT is too exposed to Quebec City retail.

Cut their distribution by 37%. Assets are going to shrink. He thinks 2019 they can grow 13%. They have a plan to internalize construction. There are more compelling REITS. It is probably a turnaround story here.

Is the dividend sustainable? Dividend was cut 40-50% in December’s reorganization. They became unfocused and aligned with Target and Sears locations. Would stay away from this.

December 2021 Bond yielding 4.25%. Buying one high-yield bond is like going to a casino and putting your money on 36 on the roulette wheel. It’s a terrible idea and makes no sense. The company has had to cut its distribution in the last 12 months.

The big picture is a little bit bearish. There is a look to this stock that it is heading for $15. If it breaks the bigger picture downtrend it will be positive.

(A Top Pick Oct 11/16. Up 1.31%.) This gain is primarily due to the distribution. The capital value is off about 8%-9%, and the distribution has basically put you flat. The REIT is a very cheap now. They had some technical problems which are now behind them.

Had a ratings issue with Moody’s, but have been dealing with that. They cut back the pay-out unnecessarily, but as a sot to the rating agency. As things get going again, this is a very, very cheap REIT. On top of that, Québec, is really humming on all cylinders. They are making excellent progress in reducing unreleased space to bring its occupancy level to the average for the industry. Dividend yield of 8.4%. (Analysts’ price target is $14.)

They had an 11% yield, which they cut to 8.5%. The stock does not have a good trend line. Rate increases are not positive for them. You have to have pretty strong growth. It is shopping centers in Quebec. The balance sheet is better, but still not great.

They own strip malls and were hit by the Target bankruptcy. They did a dilutive equity issue. Their biggest risk now is being downgraded by credit agencies. It makes it harder to get funding. It is no longer a growth REIT, but just trying to fix a problem. Stay away as it will be problematic over the next couple of quarters. The yield says there is a pending distribution cut coming.

He would be a little concerned with this REIT because the balance sheet is stretched. They’ve got a lot of debt. If you think inflation rates are going to creep a little higher, you want to have a relatively strong balance sheet. A lot of their net operating income tends to be focused in Québec, and he has seen NOI (net operating income) growth, which tends to overhang the stock, especially when you marry it with how heavily indebted it is. Management had gone on an acquisition spree in the last 5 years and leveraged up the balance sheet.

(Market Call Minute.) This is not for the faint of heart. It is very, very cheap. They had negative AFFO growth in the last quarter. Their occupancy isn’t bad. They are probably going to cut their distribution by 25%. If they do, the stock will probably rally on that. This is one you could be poking around with at these levels.

Trading at 60% of its BV and has a payout that is covered. If they were to cut their dividend down to about 8%, a sustainable rate, he thinks the stock would take off. Dividend yield of 11%. (Analysts’ price target is $14.)

Has a really high yield. Payout ratio is well over 100%. They either have to raise equity, which they can’t do, sell assets, or cut the dividend which they might as well do as the market is assuming they are going to.

Not one of his favourites. They had done historically well of growing through development. It was family owned, which spent a lot of money buying properties, and then went on a huge acquisition binge a few years ago. As a result, they probably overpaid. Tried to diversify out of Québec. Operationally, things haven’t gone their way. You probably have better risk/reward in other REITs. Dividend yield of 11%+, which would worry him.