Opinions
Derek Warren
Nexus Real Estate Investment Trust
NXR.UN-T
WEAK BUY
May 26, 2025
Stock price when the opinion was issued
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It is a very good company with 85% of its business in the warehouse space. It is looking to get out of the office space part and extend the industrial component. Has facilities in B.C. too. It is actively issuing shares to become larger. Consider it a safe hold with a good distribution yield and growing rents.
Small cap, so be careful of volatility. Was diversified real estate, but now turning into pure-play industrial. Loves the industrial theme. Low cost, low capital intensity. Big headway in the London ON market, a real hotbed of activity for transportation and distribution. Yield is 7.71%.
(Analysts’ price target is $11.93)80% industrial, hoping to get to 90% by end of this year. Still owns some office and retail. Needs to sell assets to lower net debt, and then buy better-quality industrial assets. An execution and show-me story. Above-average debt profile, with an above-average dividend yield of 8.8%. Management's done well. Interest rates are a headwind.
Struggling a little with debt. Solid managers. Industrial REITs are doing gangbusters. Are fully occupied and lease rates are rising. As they have been selling non-core assets, the market has pressured shares. Doesn't think they will cut the dividend. Is moving in the right direction. Lower rates will help.
Great name. Industrial segment is one of the more economically sensitive spots. A lot of it counts on shipping, manufacturing, AMZN goods, etc. On-again, off-again tariffs are creating both fear and opportunity. Stock's come off too much, the situation's not that bad. Still have a good industry here in Canada, which might actually be growing as we go back to "Buy Canada".
The risk is a recession, which is very hard to predict. If there is one, this name would be hurt a bit more. If you think we're going to skate through, then now is the time to pick this up.