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Do You Buy SmartCentres REIT And Its 5.6%-Yielding Dividend?

Published Thu, 06 Dec 2018 10:41:36 -0500 on Seeking Alpha

Investment Thesis
SmartCentres REIT (OTCPK: CWYUF) (TSX:SRU.UN) is a developer and operator of grocery anchored and retail-focused properties. The company has a strong focus in urban markets in Canada. The REIT has also consistently maintained its occupancy ratio above 98% in the past few years. In addition, SmartCentres should be able to benefit from urban intensification in the next decade as nearly half of its properties have the potential for intensification. The company’s dividend is attractive with a 5.6%-yield. However, its average rent growth rate has stagnated in the past year. We think it is a safe investment for investors seeking a stable dividend income. For those who wants higher return, they may want to look into other retail REITs such as First Capital Realty (OTCPK: FCRGF) or RioCan REIT (OTCPK: RIOCF).

Source: YCharts
What we like about SmartCentres REIT
A focus in major urban markets
The pie chart below shows SmartCentres’ gross revenue by province in the first 9 months in 2018. As can be seen, revenue from Ontario and Quebec represented about 76.4% of its total gross revenue (primarily in the Greater Toronto and Greater Montreal areas). In fact, 84% of its properties are located in urban or near urban markets. The focus in Canada’s urban markets is advantageous because these markets usually benefit from higher demand due to denser population and higher household income growth rate. We believe this is one of the main... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
RIOCAN REAL ESTATE INVESTMENT TRUST 20.08   0.0 0.00 0.00 0.00


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