The broader discussion of the moment is about rates and their future path and relative value of earnings and dividends compared to t bills and low risk savings of the like.
Do you feel that any of these sectors are good buys at the moment? Could you maybe rank or group which you feel are best or just in vs out?
Thank you,
Peter
As a general comment, we would consider telcos, banks, insurance and pipes to have 'more' upside potential than REITs and utilities. Growth opportunities exist, and in a lower rate environment their dividends will be more appreciated. It really becomes a question of safety vs growth potential. We would rank, today, based on a two-year outlook: Insurance, banks, pipelines, telcos, utilities, real estate. BUT...if safety is the main concern we would rank utilities first. We would be fine chipping away on the buy side of any of these sectors, but insurance looks the best to us right now overall. Telcos have struggled but still have growth opportunities, and the Canadian market remains an oligopoly.
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