Q: Hi 5i Team,
I am thinking of getting back into INO for the dividend. I have owned it in the past but sold it before the market volatility.
At the current share price it looks attractive but do you think the dividend is reasonably safe? (Recognizing you don’t have a crystal ball)
And do you see a more optimistic future for INO if interest rates decline next year?
If you think there are better REITs with comparable dividends any suggestions would be appreciated.
Thanks for all you do!
I am thinking of getting back into INO for the dividend. I have owned it in the past but sold it before the market volatility.
At the current share price it looks attractive but do you think the dividend is reasonably safe? (Recognizing you don’t have a crystal ball)
And do you see a more optimistic future for INO if interest rates decline next year?
If you think there are better REITs with comparable dividends any suggestions would be appreciated.
Thanks for all you do!
5i Research Answer:
INO is cheap certainly at 4X cash flow. But its 18% yield highlights its risks. Its European exposure adds risks due to the economic/political situation there, and its tiny size ($64M) and negative momentum (-41% this year) and further risk. Payout ratio is 80% right now, but could easily rise above 100%. We would not consider the distribution fully safe. We would not endorse it right now. We cannot get equivalent yields with any degree of safety at all. We would suggest CAR.UN, IIP.UN or DIR.UN instead. Yields are lower but with better performance total returns have been much higher with these than with INO.