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Dream Industrial: This 6.3%-Yielding REIT Remains Significantly Undervalued

Published Wed, 27 Feb 2019 20:45:20 -0500 on Seeking Alpha

Investment Thesis
Dream Industrial REIT (OTC:DREUF) (TSX:DIR.UN) delivered solid 2018 with its execution of dispositions and acquisitions strategy. Its outlook is favorable thanks to (1) strong industry fundamentals, (2) favorable leasing spread, and (3) its focus in Quebec and Ontario. Its shares are currently trading at a valuation below its peers with an attractive dividend. The company remains a good investment choice for investors seeking both capital appreciation and dividend income.
Data by YCharts
Recent Developments
Dream Industrial has done well to transform its portfolio in 2018. The company has sold some of its non-core properties and strategically expanded its portfolio to include properties in the United States. In 2018, the company improved its occupancy ratio to 97.1% at the end of 2018 from 96.6% a year ago. In Q4 2018, it generated funds from operations of C$0.22 per share. This was slightly less than a year ago primarily due to timing of reinvesting proceeds from equity offerings in 2018. Its net asset value has increased to C$10.54 per share in Q4 2018. This was higher than the NAV of C$10.12 per share back in Q3 2018.

Source: 2018 Annual Report
Reasons why we like Dream Industrial and its growth prospect
Strong industry fundamentals
The rise of e-commerce and the demand for fast delivery have created strong demand for warehouses and fulfillment centres. In order for retailers to deliver products to the consumers quickly,... Read more


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