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Opinions Joshua Varghese
Dream Global REITDRG.UN.TOBUYAug 16, 2018
Joshua VargheseStock price when the opinion was issued
As of Dec 11, 2019. Market Open.
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Jaime CarrascoHis favourite REIT, because most of the cash flow is coming from Europe, and he wants to generate more cash outside Canada. (Analysts' price target: $15.54)
Jaime CarrascoInovalis (INO.UN-T) or Dream Global (DRG.UN-T)? There is probably too much duplication to own both. Management has done a very, very good job since the IPO. They’ve grown through acquisition and have diversified. They own an institutional quality portfolio, and thinks they have an opportunity to grow in continental Europe. Their assets are primarily in Germany. Instead of buying Canadian names that have exposure to Europe, he is actually going directly into Europe and buying some names.
It is a decent name if you own it. It is tough to switch out of it. He has preferred names including a top pick today. Management promised to diversify the portfolio and they did a good job of that. The payout ratio is high so this is why he is cautious on it. There are risks in the devaluation of the Euro. He does not think they will have to cut the dividend.
It's doing well in European markets that are still catching up to North America. European office markets' fundamentals have lagged ours. You'll be fine with this. But management may consider an equity raise. He really likes the office space in France and Spain.