I do not have any REITs and with the state of office space these days, I am always a little concerned.
However, I just read about this company “SmartCentres” that pays an 8.2% dividend (pretty amazing – but it is sometimes a warning sign). Based on company information, it states that it has “98.5% in place and committed occupancy” which I believe is positive.
According to its profile (in 5i), the stock appears to be close to its low for the past year. In fact, the stock is lower than the “Low Target price”. The liquidity ratios appear to (very) good. I don’t know how it compares to its peers but the P/E ratio also appears low compared to its historical trend.
I understand this is not a growth stock but my need is to find some balance and dividends are always good (especially at 8.2%). I also own other dividend paying stocks, such as Enbridge which I’ve acquired slowly over the past number of years. The stock price today is a little lower than when I bought it as the stock price has not changed very much during the last 10 years (but the dividend is very good and the volatility has been reasonable). It has been a very good paying GIC.
Any thoughts on the above. If you have better ideas for dividend paying stocks (or ETFs), please list your top 2 or 3, with a short explanation. As a secondary question, for dividends to rise to 8.2% for SRU and 7.8% for Enbridge, is it also possible that these stocks are out of favor and may also have some potential capital appreciate over the years? Thanks.
(As an aside, I compared the 10 year chart provided by 5i in the “Enbridge profile” section with 2 other charting tools and the one in 5i did not match. I did a comparison because I felt that the return I got with Enbridge did not align with the 5i profile chart.)
SRU.UN pays a 'distribution' now yielding 8.1%. Keep in mind this is taxed differently than a Canadian dividend, and the tax breakdown can vary yearly. It is cheap on a cash flow basis at 10X, and other metrics are good or decent. Payout ratio is 89.4%. Sentiment towards shopping centres is only slightly better than sentiment towards offices, but it is priced well and it has never cut its distribution, even in the covid pandemic (but it has not increased since 2019). We would consider it 'decent' for income. On yields, the higher yields do reflect investor sentiment. If this changes, or interest rates do fall, there is some potential for gains. On charts, some charts will include dividends in returns and some will not.
Other suggestion: FTS, which has increased its dividend every year for more than 50 years. BAM: a lower yield 3.75% but higher growth and it plans to pay out most cash flow as dividends. SLF: a solid, conservative insurance company with a very solid dividend growth record.