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

Doesn’t think you are going to get a lot of capital appreciation on this, but the yield is very attractive for a very large company. They need to get their debt down, which implies that if the price does go up, they will issue stock, which will bring the price down. If you are a yield focused investor, looking for a large, very liquid stable company, and you like the Quebec economy, this would be a good play. 8.8% yield.

Doesn’t own this as he was a little disappointed with the growth pattern it had. The nice thing, if you have a long-term view, is that its yield is about 8.5%. Cheap on a historical basis, trading at around 11X earnings. If you believe the Québec economy is going to pick up, this could work out very well.

Why have they discontinued the DRIP? If a company has stopped their DRIP program, it’s more that they don’t want to continue issuing shares and continuing its dilution. REITs are a good place to be, and this is one of the better ones. His company has it as a Sector Perform with a $17.50 target in 12 months.

Has always liked this REIT. His company has this with a $17 target and as a sector perform. Management has made really good decisions in that they have sacrificed a little bit of growth in order to make sure that the balance sheets are nice and safe.

A cheap REIT and is trading at a discount. The only question is, where is the Québec economy going. Have a lot of office exposure in Montréal and he doesn’t like the Montréal office market right now. The retail is okay, but is under the same pressure as everywhere else. His concern is about growth going forward. Dividend yield of around 10%.

Quebec will outperform. They have done a great job at creating pharma services. They got hit by Target’s departure. Retailers are trying to create value by lowering their square footage. CUF.UN-T should do alright, however.

The biggest concern is that it is highly leveraged form and acquisition binge. It reduced their exposure in Quebec, however. You will get a higher yield. He likes the more diversified REITs, (e.g. HR.UN-T) but would hang on to this one.

The market is expressing a bit of disappointment in the company’s strategy. There is some concern about the Québec economy, but over the last few years they have been engaging in a large growth boom. Market was concerned that it was growth for growth’s sake, as opposed to quality transactions, such as secondary malls, which are the properties you just don’t want to be in during this cycle. Dividend yield of about 10%. He owns a small piece of this.

Switch holdings to Goldcorp (G-T)? Cominar is not a company he would be buying right now because he has concerns with their growth going forward and the geographical location of some of their properties. A switch to precious metals makes sense, but he wouldn’t necessarily buy Goldcorp. Consider Agnico-Eagle (AEM-T) instead, which will have more growth. Goldcorp just has too many assets.

It is primarily in Quebec, Quebec City. They have had some issues with debt which were corrected. A lot of real estate in Canada is trading at a 25% discount. He would not sell down here, but he does not know what is the catalyst to move them higher. It is a slow recovery.

Has been shy to be in the REIT space. Hasn’t had exposure there for the last couple of years. The reality is that it has done fairly well because everyone thought the Bank of Canada was going to raise rates, and interest rate sensitive securities would sell off. When that didn’t happen, the REIT space rallied. You have to look at this in conjunction with what else you own that is interest rate sensitive, because the challenge is that these names sell off well in advance of interest rates actually going up. Share price hasn’t done too much and you are basically here for the yield. Dividend yield of 9.7%.

The question is: Is it all done? All the bad news is priced in, people say, but he does not agree. He is there, but underweight.

Stock vs. Stock. D.UN-T vs. CUF.UN-T. Both distributions are pretty safe. Interest rate rises are negatively affecting these. A lot of investors have a fear regarding Canadian Real Estate.

There is no news and this thing has just been drifting down. Thinks it is because they have a higher debt level and there is concerns that we could be heading into a Canadian or global recession. If that is the case, small caps get hit. They have an Ontario and Québec focus, which is probably good not being in Western Canada. Nice distribution that is reasonably safe. Trading at a real discount to its five-year period as long as you are comfortable with the economic cycle, which he is, then you can own this.

Would not be his preferred diversified REIT in Canada. Other names such as Artis (AX.UN-T) or H&R (HR.UN-T), gives you a yield that may be a little lower, but a payout ratio that is a lot lower and a much healthier balance sheet. The big issue with this is that they grew too quickly through acquisitions. However, if you own, you can hang onto it and you will be fine longer-term.