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Derek WarrenKillam Properties IncKMP.UN.TOPAST TOP PICKNov 13, 2013

(A Top Pick Sept 24/13. Down 3.43%.) Had a weak quarter operationally. Thinks there is a bit of calm happening in their markets in the Maritimes. There was a lot of building and properties in a race up to the demand that will be required with shipbuilding contracts. This will be very long process into late 2014-2015 for the real growth to kick in. Buy this on weakness. 5% yield.

Derek Warren

Owned

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$10.66

Stock price when the opinion was issued

$18.93

As of Jun 10, 2026. Market Open.

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HOLD

Very well managed. Company size is in the top 5. Originally focused on the Maritimes, which has seen a lot of population inflows. Expanding into other markets in Ontario such as Kitchener-Waterloo. Likes that they're experienced developers, always improving. Energy-efficient, new construction. Not facing high-rent pressures of others.

HOLD

Reports on November 5.

Now trading at an interesting level, over 15% discount to NAV. Fallen perhaps because of announcement on immigration being curtailed. 60% of portfolio in Atlantic Canada, actively diversifying in Ontario and BC. Likes that 44% of assets are not subject to rent control. Expecting results to be good. Stay the course.

HOLD

20% discount to NAV. Very good portfolio. Originated in eastern Canada, has moved west. Comfortable owning, but better opportunities elsewhere. See his Top Picks.

BUY

Very good performance the past few months. Falling interest rates good for business. Good way to play residential market in Canada. Expecting dividend to rise. If rates fall, will be even better for business. Expecting capital appreciation going forward.

PARTIAL BUY

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

KMP.un's second-quarter funds from operations (FFO) per unit came in at $0.30, an increase of 7.1% year-over-year. The company reported a net income of $114.5 million, against $68.7 million reported in the second quarter of 2022, beating estimates by a wide margin ($30.4 million). The jump was attributed to $96.2 million of fair value gains on investment properties in the period. KMP generated a net operating income of $56.2 million, an 8.8% increase from 2Q22. The rolling 12-month adjusted FFO payout ratio shrank by a full 2% to 73% in the recent quarter. Same-property net operating income growth came in at 7.9%, matching the management target. We think it was a decent quarter and management spoke about market rent growth in certain areas and a focus on development and disposition of assets.
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BUY

Highest immigration to maritime provinces in Canada ever(own lots of properties in maritimes). Excellent dividend yield with discount to net asset value. Superior return to buying a GIC. Would recommend buying.

BUY ON WEAKNESS

Allan Tong’s Discover Picks Killam pays a higher dividend of 4.18% and trades at only a 7.61x PE, down from 9.25X nearly a year ago. Like CAP REIT, Killam’s forward PE is substantially higher at 16.67x, so the market has high hopes for this REIT stocks . Last month, TD raised its price target on the name from $21 to $22 and issued a buy signal. Read 3 Promising REIT Stocks for our full analysis.

HOLD

He's never really liked CAP.UN. His proxy is KMP.UN, focused in Nova Scotia. Growth profile of immigration coming into Halifax.

BUY

Allan Tong’s Discover Picks Other numbers look healthy for KMP stock: A 9.6% PE, a 3.15% dividend based on a 26% payout ratio (half the sector’s number), and an ROI of 7% which is in-line with peers. KMP.UN boasts five buys and one hold on Bay Street with a $23.33 price target. That’s 5.18% higher. So, add the divvy and in a year, you’ll collect 8.33%. Maximize your gain by holding this in your TFSA. Safe and profitable, KMP.UN will let you sleep at night. Read 3 Long Term Growth Stocks for our full analysis.

BUY

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The recent property acquisition was well received by the market. The $190M purchase looks good and 5i likes the expansion into Ontario to diversify the business. Occupancy rate is high at 98% and average rent is $1,200. Unlock Premium - Try 5i Free

BUY

He's generally positive this. They're operated well during the pandemic. About 70% of their portfolio is in Atlantic Canada, which is stable. They've tried growing in Ontario and BC. Their valuation has hung in better than their peers. But he prefers REITs in hard-hit centres like Toronto's and Montreal's business cores Still a good REIT at current levels, though there's better upside elsewhere. The dividend is safe.

HOLD

Thinks highly of management. Focus on Atlantic, with nice expansion west. Stable operator. Nice value-added strategy. Steady growth. Rebounded nicely off lows. But growth won't be the same as other REITs.

BUY

Killam vs. Crombie REITs Killam holds apartments, an asset class he really likes among REITs. Rent-collection rates are really high for Killam, so no worries about that. All these REITs trade at a 10-15% discount to NAV. Funding costs will drop 1%, because they get funding from CMHC. A hiccup comes from mobile homes which had weakness in the last quarter. Other businesses are fine. CROMBIE: He owns Crombie's debt, not the REIT. This is anchroed by Canadian Safeway and Sobey stores. Highly defensive. Sobeys had an integration problem out west. He likes this as a conservative REIT, but it won't do much. Likes both.

PAST TOP PICK

(A Top Pick Oct 31/19, Down 6%) Recently trimmed position. Still sees upside. Collections are resilient. Very attractive price, 15% discount to NAV. Yield over 3.5%.

HOLD

Will it do well after a Covid vaccine emerges? They've been collecting all their rents. Good managers. He likes apartment REITs, which are well-positioned. After a vaccine, there will be higher rates of immigration that the government will promote. Immigrants will seek affordable housing, so Killam will benefit. Now, KMP is fairly valued, so hold and be patient.

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Derek WarrenKillam Properties IncKMP.UN.TOPAST TOP PICKNov 13, 2013

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