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: Cominar REIT, $16.28, symbol CUF.UN on Toronto (Units outstanding: 169.0 million; Market cap: $2.8 billion; www.cominar.com), is Quebec’s largest owner of commercial properties.
In all, the trust holds 567 properties, including 136 office buildings, 196 shopping malls and 235 industrial and mixed-use buildings. In all, these holdings contain 46.0 million square feet of leasable space located in Montreal (57%), Quebec City (22%), Ontario (13%), the Atlantic provinces (6%) and Western Canada (2%). Cominar’s occupancy rate is 92.3%.
The trust continues to grow by acquisition: in 2014, it bought 66 properties for a total of $2.0 billion, then added three more industrial buildings in Montreal for $34.5 million in the first half of this year.
Contributions from new properties increased Cominar’s revenue by 26.3% in the three months ended June 30, 2015, to $226.9 million from $179.6 million a year earlier. Cash flow rose 28.4%, to $65.7 million from $51.2 million. The trust sold new units to help fund its recent purchases, causing cash flow per unit to slip 2.5%, to $0.39 from $0.40, on more units outstanding.
The REIT pays monthly distributions of $0.1225 per unit, for a 9.0% annualized yield. It paid out 92.0% of its cash flow as distributions in the latest quarter. However, if you exclude payouts in units to investors in Cominar’s distribution reinvestment plan, the cash payout ratio was a moderate 64.6%. There are of course, no guarantees, but Cominar’s current distribution rate appears safe.
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In all, the trust holds 567 properties, including 136 office buildings, 196 shopping malls and 235 industrial and mixed-use buildings. In all, these holdings contain 46.0 million square feet of leasable space located in Montreal (57%), Quebec City (22%), Ontario (13%), the Atlantic provinces (6%) and Western Canada (2%). Cominar’s occupancy rate is 92.3%.
The trust continues to grow by acquisition: in 2014, it bought 66 properties for a total of $2.0 billion, then added three more industrial buildings in Montreal for $34.5 million in the first half of this year.
Contributions from new properties increased Cominar’s revenue by 26.3% in the three months ended June 30, 2015, to $226.9 million from $179.6 million a year earlier. Cash flow rose 28.4%, to $65.7 million from $51.2 million. The trust sold new units to help fund its recent purchases, causing cash flow per unit to slip 2.5%, to $0.39 from $0.40, on more units outstanding.
The REIT pays monthly distributions of $0.1225 per unit, for a 9.0% annualized yield. It paid out 92.0% of its cash flow as distributions in the latest quarter. However, if you exclude payouts in units to investors in Cominar’s distribution reinvestment plan, the cash payout ratio was a moderate 64.6%. There are of course, no guarantees, but Cominar’s current distribution rate appears safe.
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Merus Labs International Ltd., $1.97, symbol MSL on Toronto (Shares outstanding: 102.3 million; Market cap: $201.5 million; www.meruslabs.com), is a Toronto-based company that acquires the rights to established drugs.
Merus mainly targets relatively small, mature products, as opposed to the newer treatments that attract the attention of larger drug firms. The company outsources its manufacturing and other operations, so it has low operating costs and few employees. By focusing on acquisitions, it also spends nothing to develop new drugs.
The company’s main products include Enablex (an overactive-bladder treatment), Sintrom (anticoagulant) and Vancocin (antibiotic). It mainly sells these drugs in Canada and Europe.
In May 2015, Merus paid Novartis Pharma $29.5 million U.S. for the rights to two more drugs: Salagen (which relieves dry mouth symptoms in cancer patients undergoing radiation therapy) and Estraderm (a hormone replacement therapy for women). In 2014, these treatments had total revenue of $10 million U.S.; this deal lets Merus make and sell them in certain European countries.
In its fiscal 2015 third quarter, which ended June 30, 2015, the company’s revenue rose 32.3%, to $9.5 million from $7.2 million a year earlier. Its two new drugs (Salagen and Estraderm) accounted for 37% of the increase.
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Merus mainly targets relatively small, mature products, as opposed to the newer treatments that attract the attention of larger drug firms. The company outsources its manufacturing and other operations, so it has low operating costs and few employees. By focusing on acquisitions, it also spends nothing to develop new drugs.
The company’s main products include Enablex (an overactive-bladder treatment), Sintrom (anticoagulant) and Vancocin (antibiotic). It mainly sells these drugs in Canada and Europe.
In May 2015, Merus paid Novartis Pharma $29.5 million U.S. for the rights to two more drugs: Salagen (which relieves dry mouth symptoms in cancer patients undergoing radiation therapy) and Estraderm (a hormone replacement therapy for women). In 2014, these treatments had total revenue of $10 million U.S.; this deal lets Merus make and sell them in certain European countries.
In its fiscal 2015 third quarter, which ended June 30, 2015, the company’s revenue rose 32.3%, to $9.5 million from $7.2 million a year earlier. Its two new drugs (Salagen and Estraderm) accounted for 37% of the increase.
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Freeport-McMoRan Inc., $11.18, symbol FCX on New York (Shares outstanding: 1.1 billion; Market cap: $12.7 billion; www.fcx.com), is a leading producer of copper, gold and other metals from mines in the U.S., Indonesia, Africa and South America.
In 2013, the company diversified into oil and natural gas by acquiring McMoRan Exploration and Plains Exploration & Production, which have properties in Louisiana, Wyoming and California, as well as wells in the Gulf of Mexico. Freeport paid a total of $9 billion for both companies.
In 2014, copper supplied 60% of Freeport’s revenue, followed by oil and gas, 20%; gold, 7%; molybdenum (which strengthens and prevents rust in alloys and high-temperature steels), 6%; and other minerals, 7%.
The U.S. accounted for 48% of total revenue, followed by Indonesia (8%), Japan (7%), Spain (6%), China (5%), Switzerland (4%), Chile (3%), Turkey (2%) and South Korea (2%). Other countries supplied the remaining 15%.
In the three months ended June 30, 2015, Freeport lost $1.85 billion, or $1.78 a share, after the plunge in oil and gas prices forced it to write down its oil and gas holdings by $2.7 billion. Without unusual items, the company earned $143 million, or $0.14 a share, down 70.3% from $482 million, or $0.46, a year earlier.
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In 2013, the company diversified into oil and natural gas by acquiring McMoRan Exploration and Plains Exploration & Production, which have properties in Louisiana, Wyoming and California, as well as wells in the Gulf of Mexico. Freeport paid a total of $9 billion for both companies.
In 2014, copper supplied 60% of Freeport’s revenue, followed by oil and gas, 20%; gold, 7%; molybdenum (which strengthens and prevents rust in alloys and high-temperature steels), 6%; and other minerals, 7%.
The U.S. accounted for 48% of total revenue, followed by Indonesia (8%), Japan (7%), Spain (6%), China (5%), Switzerland (4%), Chile (3%), Turkey (2%) and South Korea (2%). Other countries supplied the remaining 15%.
In the three months ended June 30, 2015, Freeport lost $1.85 billion, or $1.78 a share, after the plunge in oil and gas prices forced it to write down its oil and gas holdings by $2.7 billion. Without unusual items, the company earned $143 million, or $0.14 a share, down 70.3% from $482 million, or $0.46, a year earlier.
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Schlumberger Ltd., $72.09, symbol SLB on New York (Shares outstanding: 1.3 billion; Market cap: $91.2 billion; www.slb.com), is the world’s leading oilfield services firm. It works with oil and gas producers from the exploration stage through to production.
Schlumberger feels its North American business is now bottoming out, although it doesn’t expect to see a big near-term rebound. Its earnings won’t likely begin improving until 2016, although that will depend on the direction of oil and gas prices and drilling activity. To maintain its profits, Schlumberger has cut 20,000 jobs so far this year and lowered its capital spending.
Meanwhile, the company is taking advantage of the downturn to buy oilfield equipment maker Cameron International (New York symbol CAM), a maker of valves, blowout preventers and other gear for controlling pressure at drill sites, for $14.8 billion.
The stock trades at 22.5 times this year’s forecast earnings of $3.20 a share. It yields 2.8%.
Schlumberger is okay to hold.
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Schlumberger feels its North American business is now bottoming out, although it doesn’t expect to see a big near-term rebound. Its earnings won’t likely begin improving until 2016, although that will depend on the direction of oil and gas prices and drilling activity. To maintain its profits, Schlumberger has cut 20,000 jobs so far this year and lowered its capital spending.
Meanwhile, the company is taking advantage of the downturn to buy oilfield equipment maker Cameron International (New York symbol CAM), a maker of valves, blowout preventers and other gear for controlling pressure at drill sites, for $14.8 billion.
The stock trades at 22.5 times this year’s forecast earnings of $3.20 a share. It yields 2.8%.
Schlumberger is okay to hold.
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