riocan

RIOCAN REAL ESTATE INVESTMENT TRUST $27.20 (Toronto symbol REI.UN; Units outstanding: 317.8 million; Market cap: $8.7 billion; TSINetwork Rating: Average; Dividend yield: 5.2%; www.riocan.com) is Canada’s largest real estate investment trust (REIT), with interests in 338 shopping malls containing over 92 million square feet of leasable area. That total includes 48 U.S. malls with over 13 million square feet.

In the three months ended March 31, 2015, RioCan’s revenue rose 7.7%, to $331.0 million from $307.4 million a year earlier. Cash flow per unit gained 4.8%, to $0.44 from $0.42.

The trust’s latest acquisitions increased its rental space by 1.7%. It’s also doing a good job of renewing current tenants at higher rates: rents on renewals rose 9.8% in Canada and 8.3% in the U.S.

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TRANSCANADA CORP., $49.08, Toronto symbol TRP, has agreed to buy Texas-based Columbia Pipeline Group (New York symbol GPCX) for $13 billion U.S. That figure includes $2.8 billion U.S. of Columbia’s debt. This is a big purchase for TransCanada, which has a market cap of $35.4 billion (Canadian). Columbia operates natural gas pipelines in the U.S. Northeast, Midwest, Mid-Atlantic and Gulf Coast regions, as well as underground gas storage terminals. It’s now working on $5.6 billion U.S. worth of new pipelines. Columbia has already secured contracts from gas shippers, which cuts the risk of these projects....

ISHARES CDN REIT SECTOR INDEX FUND $15.10 (Toronto symbol XRE; buy or sell through brokers; ca.ishares.com) holds the 15 Canadian real estate investment trusts in the S&P/TSX Capped REIT Index. Expenses for iShares CDN REIT are 0.60% of its assets. The fund yields 6.0%. The ETF’s largest holding is RioCan REIT at 20.6%, followed by H&R REIT (12.9%), Canadian Apartment Properties REIT (9.2%), Smart REIT (9.1%), Canadian REIT (7.7%), Allied Properties REIT (6.4%), Cominar REIT (6.2%), Dream Office REIT (5.4%), Boardwalk REIT (4.7%), Granite REIT (4.5%), Artis REIT (4.2%), Crombie REIT (2.6%), Dream Global REIT (2.2%), Pure Industrial REIT (2.1%) and Northview Apartment REIT (1.9%)....

ISHARES CDN REIT SECTOR INDEX FUND $15.10 (Toronto symbol XRE; buy or sell through brokers; ca.ishares.com) holds the 15 Canadian real estate investment trusts in the S&P/TSX Capped REIT Index. Expenses for iShares CDN REIT are 0.60% of its assets. The fund yields 6.0%. The ETF’s largest holding is RioCan REIT at 20.6%, followed by H&R REIT (12.9%), Canadian Apartment Properties REIT (9.2%), Smart REIT (9.1%), Canadian REIT (7.7%), Allied Properties REIT (6.4%), Cominar REIT (6.2%), Dream Office REIT (5.4%), Boardwalk REIT (4.7%), Granite REIT (4.5%), Artis REIT (4.2%), Crombie REIT (2.6%), Dream Global REIT (2.2%), Pure Industrial REIT (2.1%) and Northview Apartment REIT (1.9%)....

RIOCAN REAL ESTATE INVESTMENT TRUST $25.02 (Toronto symbol REI.UN; Units outstanding: 320.4 million; Market cap: $7.9 billion; TSINetwork Rating: Average; Dividend yield: 5.6%; www.riocan.com) is Canada’s largest real estate investment trust. In the three months ended September 30, 2015, RioCan’s cash flow rose 5.0%, to $140.2 million from $133.6 million a year earlier. Per-unit cash flow gained 2.3%, to $0.44 from $0.43, on more units outstanding. The trust has now agreed to sell its 49 U.S. malls for $1.2 billion (Canadian). It expects to complete the sale in April 2016....

RIOCAN REAL ESTATE INVESTMENT TRUST $25.02 (Toronto symbol REI.UN; Units outstanding: 320.4 million; Market cap: $7.9 billion; TSINetwork Rating: Average; Dividend yield: 5.6%; www.riocan.com) is Canada’s largest real estate investment trust. In the three months ended September 30, 2015, RioCan’s cash flow rose 5.0%, to $140.2 million from $133.6 million a year earlier. Per-unit cash flow gained 2.3%, to $0.44 from $0.43, on more units outstanding. The trust has now agreed to sell its 49 U.S. malls for $1.2 billion (Canadian). It expects to complete the sale in April 2016....

RioCan REIT is selling U.S. malls to cut debt and add to its Canadian holdings.

The BMO Low Volatility Canadian Equity ETF, $25.54, symbol ZLB on Toronto (Units outstanding: 25.6 million; Market cap: $653.8 million; www.etfs.bmo.com), provides exposure to a low beta weighted portfolio of Canadian stocks. The ETF selects the 40 lowest beta stocks from the 100 largest and most liquid securities in Canada. The underlying portfolio is rebalanced in June and reconstituted in December. The BMO Low Volatility Canadian Equity ETF has an MER of 0.40%. It currently yields 2.5%. The BMO Low Volatility Canadian Equity ETF’s current top holdings are: Fairfax Financial, Canadian REIT, Dollarama, Progressive Waste Solutions, Empire Company, Intact Financial, RioCan REIT, Emera, Metro Inc. and BCE Inc....

We recommend that you limit aggressive holdings to 30% of your overall portfolio (10% for more conservative investors). That’s especially true in light of the recent stock market volatility. We like the long-term outlook for these five aggressive stocks. However, only four are buys right now. RIOCAN REAL ESTATE INVESTMENT TRUST $23 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 320.4 million; Market cap: $7.4 billion; Price-to-sales ratio: 5.7; Dividend yield: 6.1%; TSINetwork Rating: Average; www.riocan.com) owns all or part of 305 shopping centres in Canada, including 16 under development....

RIOCAN REAL ESTATE INVESTMENT TRUST $24.99 (Toronto symbol REI.UN; Units outstanding: 319.9 million; Market cap: $8.2 billion; TSINetwork Rating: Average; Dividend yield: 5.5%; www.riocan.com) has settled its dispute with U.S.-based department store chain Target (New York symbol TGT).

In April 2015, Target closed all 133 of its Canadian stores, including 26 in RioCan’s malls. So far, the trust has found new tenants for seven of these stores. It will have to remodel the other 19, but it expects to have them rented by the end of 2017.

Target has now paid $132 million in compensation. Of that total, $92 million went to RioCan and $40 million went to its partners in some of these malls.

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