Stock price when the opinion was issued
Great to have a tenant like WMT, as it makes the cashflow very dependable. Being so defensive means not a lot of internal growth, really lags compared to peers, bottom line cashflow not increasing. Higher leverage than peers. Muted earnings growth.
Higher distribution yield around 8%. Could own for the yield. Dividend secure. Payout ratio below 100%.
He's generally positive on retail across Canada. WMT is its largest tenant, with very good credit; but doesn't pay a lot in terms of "escalators" on rents. Lower growth profile than other opportunities. Last quarter, income growth just 1.3%. Own it for a consistent yield; previously not covered, but now it is.
True that main tenant WMT typically doesn't have to pay large annual increases in rent, but it does attract other tenants and that's who pays the rent increases. Entering new leases with WMT as it expands. The very large parking lots can be converted to other uses. Great potential to collect the yield and wait for that potential to be realized.
Main tenant is WMT, which is a blessing and a curse. WMT drives a lot of traffic and attracts a lot of tenants, and it has great credit. But WMT has locked in low rents for a long time, though rents can be raised for the other tenants. Not as much growth as some of the other grocery-anchored REITs.