Q: Hello Team,
Could you please comment on these two reits and do you have a favourite between them for total return going forward?
Thank You,
Barry
Could you please comment on these two reits and do you have a favourite between them for total return going forward?
Thank You,
Barry
5i Research Answer:
CHE.UN is not really a REIT, it is just set up as an income fund. It is highly leveraged to chemical prices/volumes. The stock is cheap and offers a good dividend, but the dividend has been cut in the past. Minimal earnings growth exists here. EPS in 2026 is going to be the same level as 10 years ago. Considering an upcoming global slowdown, we do not find it very interesting. FCR.UN looks better. It is more expensive but less vulnerable, in our view. Its retail portfolio is largely anchored by grocery and drug stores, which adds some stability to cash flow.