RioCan Real Estate Investment (REI.UN.TO)

There is a new category for REITs, which will broaden the appeal, so valuations may improve further. This is certainly a decent longer-term Buy.

(Market Call Minute.) Trades at a bit of a premium to NAV. A high-quality company. 80% of its real estate is in Canada’s 6 largest cities.

For an RESP? Having a dividend payer that can continue to compound is a fantastic opportunity. This one would definitely be a great payer for an RESP. It is going to have a slow 2017. Sold off its US properties, so it doesn’t have that cash flow, but is using that to do fantastic developments, but are not going to come on line until late 2017 or 2018. This is one you definitely want to accumulate on any dips.

(Market Call Minute) The property business should continue very strong in Canada and North America.

Has had a good little run lately and has done quite well. People tend to gravitate towards the largest names and this is the largest name in Canada. There is a lot of speculation that they are going to be added to the TSX 60 sometime in the next 2 years. If so, they could spike and then fall, and that is what he is concerned about. Fundamentals are OK. Retail has been under a fair amount of pressure. A fantastic management team. Very low debt.

Thinks this is the time to start owning large caps. He expects a softer year. Sold all of its US portfolio, so loses that income. It is putting that money toward some excellent developments, but they still have to build them before earning cash flow. A fantastic organization with a lot of growth opportunities going forward. Dividend yield of 5.19%.

There is such a hunt for yield. The cash flow from these companies is paid out to shareholders in a juicy fashion. They are very interest sensitive. He would not rule out an interest rate cut in Canada after this year and that would not bode badly for REITs. For this one you have to ask if you are there for yield or appreciation. This is a mature company that all investors are aware of. He does not see significant upside. There are other places you could get this yield.

They were impacted with Target pulling out of Canada. Some of the tenants in REI.UN-T properties want to renegotiate for lower rents. They may refocus in Canada, but they are such a big operator. She is not sure what they plan on doing. Their distribution is safe because they have the cash. Prefers HR.UN-T.

(A Top Pick Dec 29/14. Down 3.46%.) This has been flat over the past year. Had announced a strategic review to sell their US properties, which kind of put a cloud over the stock. Dividend yield of just under 6%.

The largest retail REIT. Retail properties are affected when the economy is dragging. He expects our economy to continue dragging a little more. Wait until you see the Canadian economy pick up.

Probably the oldest and biggest REIT in Canada and is really well run. Has had some tough times this year because they were the biggest landlord for Target Canada. Have been unwinding a lot and now have to re-lease their space, which is going to take some time. Also, had a joint venture in the US and just announced they are liquidating that, and will make a lot of money because of currency exchange. Likes the long-term outlook for this.

(A Top Pick Dec 29/14. Down 3.62%.) Just sold their US retail assets for $2.7 billion. A very exciting time to own this. Price was a little less than what they had implied it might be. He would be buying.

REITs usually do quite well in the summer. This one is sensitive to the economy at the same time. It is above support, but there is a downward trend line showing. If it broke below around $23, that would be a bad sign. He would not be picking up this at this time. If you own, continue to Hold.

You can’t go too wrong owning REITs. This one is a large cap and one of the “go to” REITs for generalists out there. However, he would be a little concerned about retail exposure, and this company has a fair bit. Dividend yield of almost 6%, which is a bit high.

He has only owned it as a debt. Great managers, but it is so big. They went into the US and are now exiting. They got hit hard with Target. It is in all the indexes. If this thing ever misses, they will get hit hard. He does not like retail, but he likes apartments.