riocan

RioCan and H&R continue to build new residential and industrial properties to cut their exposure to the retail industry. Their new properties—along with store reopenings as the pandemic eases—should help both REITs raise investor distributions in the next few years....

While most investors get the bulk of their dividend income from utilities and banks, we recommend they add other dividend-paying stocks from our Aggressive Growth Portfolio such as the three we analyze below. Each of the three is in a strong position to benefit as the economy continues to re-open, spurring cash flow and dividend increases.


RIOCAN REAL ESTATE INVESTMENT TRUST $22 is a buy. The REIT (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 317.8 million; Market cap: $7.0 billion; Price-to-sales ratio: 5.8; Distribution yield: 4.4%; TSINetwork Rating: Average; www.riocan.com) owns all or part of 214 shopping centres and other properties across Canada....

These two retail-focused REITs continue to benefit as many of their tenants remained open despite COVID-19 shutdowns. Those steady cash flows continue to support their distributions.


CHOICE PROPERTIES REIT $15 is a top pick for 2021. Canada’s biggest REIT (Toronto symbol CHP.UN; Cyclical-Growth Payer Portfolio; Manufacturing & Industry sector; Units outstanding: 723.1 million; Market cap: $10.8 billion; Distribution yield: 4.9%; Dividend Sustainability Rating: Above Average; www.choicereit.ca) creates value for investors through its 717 retail, industrial, office space, and residential properties....

RIOCAN REAL ESTATE INVESTMENT TRUST, $22.48, is a buy. The REIT (Toronto symbol REI.UN; Units o/s: 317.7 million; Market cap: $7.1 billion; TSINetwork Rating: Average; Dividend yield: 4.3%; www.riocan.com) continues to rebound as its shopping malls re-open.


In the quarter ended June 30, 2021, revenue rose 10.3%, to $297.7 million from $269.9 million....

ISHARES S&P/TSX REIT INDEX ETF, $20.33, is a hold. The ETF (Toronto symbol XRE; buy or sell through brokers; ca.ishares.com) lets investors tap all 21 Canadian real estate investment trusts in the S&P/TSX REIT Index.


Investors pay an MER of 0.61%, and the REIT fund gives you a 2.7% yield....

RIOCAN REAL ESTATE INVESTMENT TRUST $22 is a buy. The REIT (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 317.8 million; Market cap: $7.0 billion; Price-to-sales ratio: 6.0; Distribution yield: 4.4%; TSINetwork Rating: Average; www.riocan.com) continues to rebound as its shopping malls re-open....

LOBLAW COMPANIES, $86.34, is a buy. The company (Toronto symbol L; Shares outstanding: 338.1 million; Market cap: $29.1 billion; TSINetwork Rating: Above Average; Dividend yield: 1.6%; www.loblaw.ca) is now shutting down its PC Chef meal-kit delivery service, which it launched last year in the Toronto area....

RESTAURANT BRANDS INTERNATIONAL INC. $80 (www.rbi.com) is a buy. The company has 27,025 fast-food outlets in over 100 countries: 18,625 Burger King, 4,949 Tim Hortons (coffee and donuts), and 3,451 Popeyes Louisiana Kitchen (fried chicken). Restaurant Brands is now preparing to launch its first Popeye’s restaurant in the U.K....

RioCan and H&R continue to build new residential and industrial properties to cut their exposure to the retail industry. Their new properties—along with store reopenings as the pandemic eases—should help both REITs raise their distributions in the next few years....

RioCan shocked investors in late 2020 when it cut its distribution after promising to maintain the rate. COVID-19 lockdowns, particularly in Ontario, hurt the REIT’s cash flow and led to its decision to cut the payment.

While disappointing, the move was prudent as the new annual distribution rate of $0.96 a unit (which still gives you a solid 4.3% yield) is a much more sustainable payout.

Meantime, RioCan’s strategy to focus on six major cities—Toronto, Ottawa, Montreal, Edmonton, Calgary and Vancouver—positions it for long-term growth as the pandemic eases and immigration levels rebound....