This real estate investment trust’s earnings rose sharply in 2010

RioCan Real Estate Investment Trust, symbol REI.UN on Toronto, operates 297 retail properties in Canada, mainly outdoor shopping malls. It also owns 31 malls in the U.S. through joint ventures, including its partnership with Cedar Shopping Centers Inc. (New York symbol CDR). RioCan owns 80% of the joint venture with Cedar, and 14% of Cedar itself. In 2010, the real estate investment trust’s revenue rose 17.0%, to $887.0 million from $758.0 million in 2009. The real estate investment trust’s earnings jumped 166.0%, to $303.0 million from $113.9 million in 2009. Earnings per unit rose 151.0%, to $1.23 from $0.49, on more units outstanding. The increase was mostly due to a one-time non-cash reversal of future income tax charges. In 2010, RioCan acquired 19 properties in Canada and 29 in the U.S. for a total of $986 million. RioCan pays monthly distributions of $0.115 a unit. The annual rate of $1.38 yields 5.8%. With 17.2% of its investors preferring to receive new units instead of cash, RioCan’s actual cash payout was $1.14 a unit in 2010. That’s a reasonable 78.6% of the company’s cash flow per unit of $1.45. National chains, such as Cineplex (movie theatres), Metro, Wal-Mart, Canadian Tire and Zellers account for 85.9% of the trust’s annual revenue. Also, 65.2% of the company’s Canadian properties are in six of Canada’s largest cities. You can get our latest analysis, including our clear buy/sell/hold advice, on RioCan and dozens of other Canadian stocks in The Successful Investor. What’s more, you can get one month free when you subscribe today. Click here to learn how.

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Jim Bates

Jim is an associate editor at TSI Network. He is the lead reporter and analyst for The Successful Investor and Wall Street Stock Forecaster and a member of the Investment Planning Committee. Jim has held the Chartered Financial Analyst designation since 1992 and spent more than a decade at the Financial Post DataGroup before joining TSI Network. He has a Bachelor of Commerce degree from the University of Toronto.

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