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Choice Properties Real Estate Investment Trust (CHP.UN)
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Loblaw Companies Limited Second Preferred Shares Series B (L.PR.B)
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George Weston Limited 5.20% Preferred Shares Series IV (WN.PR.D)
Q: Hi 5i,
I currently own CHP.UN and L.PR.B. I would like your opinion, is there value in selling CHP.UN and buying WN,PR.D to strengthen my portfolio or should i just buy more L.PR.B. I looked but don't really understand the relationships here.
I currently own CHP.UN and L.PR.B. I would like your opinion, is there value in selling CHP.UN and buying WN,PR.D to strengthen my portfolio or should i just buy more L.PR.B. I looked but don't really understand the relationships here.
5i Research Answer:
CHP.UN is a REIT with Loblaw as its prime and majority tenant. This gives CHP very stable and secure cash flow from a large and credit-worthy tenant, but of course adds customer concentration risk. All the securities mentioned are income stocks, and will have some of the same influences (interest rates, primarily). Weston W owns 52% of Loblaws so they are all inter-connected. We would note the preferred shares get the dividend tax credit, whereas CHP.UN does not, so we would consider the tax differences as part of the decision as well. Of the three, we would be most comfortable with L.PR.B today.