A Canadian REIT That Screams Buy Me

TM editors' note: This article discusses at least one penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.

Summary

  • Today, I will introduce you to another Canadian REIT that looks promising.
  • The defensive grocery-anchored model is more appealing to investors due to the growing threat of e-commerce businesses.
  • Slate Retail's AFFO payout ratio is one of the lowest of all the Canadian REITs.
  • Slate may not be a bad place to park capital (7.4% dividend) while the company gains scale and becomes more attractive to Mr. Market.

Last week, I wrote an article on WPT Industrial (TSX:WIR.U) (OTCQX:WPTIF), a Canadian REIT that focuses exclusively on U.S. industrial real estate. Like most Canadian REITs, WPT pays a monthly dividend (6.4%) and has more debt than most U.S. REIT counterparts (WPT's debt to GBV is 50.8%).

As I informed my newsletter subscribers (in the April edition), I plan to increase my research on Canadian REITs as there are around 50 companies (north of the border) and the market cap for the Canadian REIT sector is under 10% the size of the U.S. Equity REIT sector.

(click to enlarge)

 

While WPT has risks (noted in my previous article), I believe the REIT could be valuable for a dividend investor as the income appears safe and the shares are undervalued. Like any investment, one must weigh the risks and returns to determine if the specific security has a place setting.

Today I will introduce you to another Canadian REIT that looks promising. This company is similar to WPT Industrial as it also focuses exclusively on U.S. assets, while shares can be purchased in both Canada and the U.S.

A Pure-Play Grocery-Anchored REIT

Slate Retail REIT is listed on the Toronto Stock Exchange (SRT.UN) and shares can also be purchased in U.S. dollars (SRT.U). This Toronto-based REIT made its debut as a public company on April 22, 2014 and its formation was the combination of several existing companies: Slate U.S. Opportunity (No. 1) Realty Trust, Slate U.S. Opportunity (No. 2) Realty Trust, and U.S. Grocery Anchored Retail (1A), (1B) and (1C).

1 2 3
View single page >> |

Disclosure: The author is long O, DLR, VTR, HTA, STAG, CSG, GPT, ROIC, HCN, OHI, LXP, KIM, TCO, DOC, UDF, EXR, HST, BRX, WPC, HCP, CLDT, MPW, APTS.

more

How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.