Q: Good evening
Can you please comment on this REIT ? Dividend was not cut since 2013 and according to my broker's record there was considerable insider buying during the last year. Lately it is dropping. Would you consider it a sell, buy or hold ? I will appreciate it if you can also comment on the dividend sustainability
Thanks
Can you please comment on this REIT ? Dividend was not cut since 2013 and according to my broker's record there was considerable insider buying during the last year. Lately it is dropping. Would you consider it a sell, buy or hold ? I will appreciate it if you can also comment on the dividend sustainability
Thanks
5i Research Answer:
Th distribution has not been cut in 10 years and in fact has had a series of small increases. While the payout ratio has averaged about 70%, it recently spiked to 121% so we cannot consider the dist. completely safe, especially considering the small size of the company. It trades below asset value ($7.65 as per company) and the portfolio looks decent. Net operating income rose 7% in the last quarter. Occupancy is good at 97.1%. Debt ratio is 'ok' at 52%. It has been (slowly) buying back units. We would give it a 'not bad but high risk' rating. The valuation likely reflects some of the risk, but we would in the current market just give it a HOLD.