Published Wed, 23 Dec 2020 15:00:09 -0500 on Seeking Alpha
Seeking AlphaDividend Ideas | Financials | CanadaI Didn't Like RioCan Before It Cut Its Dividend; What About Now?Dec. 23, 2020 3:00 PM ET|| About: RioCan Real Estate Investment Trust (RIOCF)by: The Dividend GuyThe Dividend Guy Dividend Growth RocksA service focused on stocks doubling their payouts within 10 years.SummaryRioCan is a Canadian real estate investment trust which owns, develops, and operates Canada's portfolio of retail-focused (90%), increasingly mixed-use properties.
RioCan FFO/unit growth has been modest since 2014, limiting the REIT's ability to increase the dividend more consistently.
The retail brick & mortar business isn't exactly skyrocketing now.
At the beginning of December, RioCan (OTCPK: RIOCF) (REI.UN.TO) dropped a bomb for retirees: They slashed their dividend by 33%.
As RioCan continues to navigate through the uncertain retail landscape created by the COVID-19 pandemic and faces an unknown length and breadth of closures, the Board has taken the prudent action of reducing our distribution. A more conservative payout ratio is important in this undeniably challenging environment despite our well positioned portfolio, solid base of tenants and deep liquidity," said Edward Sonshine, Chief Executive Officer of RioCan. "At the same time, we believe the current circumstances present an opportunity for us to optimize our capital allocation towards accretive initiatives as we remain committed to driving value creation for our unitholders and increasing distributions from this new base as conditions permit."
Source: RioCan Press Release
A lot of retirees have been devastated by that news. While I understand their pain and feel for them, I'm not so surprised. I didn't like RioCan that much for many years. So, here's why it's not part of my favorite REITs.
Business Model RioCan Real Estate Investment Trust is a Canadian real estate investment trust which owns, develops, and operates Canada's portfolio of... Read more