spin off

Department store chains are favourite targets of activist investors, as markets tend to discount their real estate holdings. That’s largely why they want Macy’s and Kohl’s to spin off their e-commerce businesses. The faster-growing online operations would probably trade at a much high multiple than the combined business....

Johnson & Johnson recently announced that it would spin off its consumer drug business as a separate firm. This follows several other big pharmaceutical firms, including Pfizer, GlaxoSmithKline and Merck, that have completed similar spinoffs.


The breakup will let Johnson & Johnson focus on its more-profitable prescription drug and medical device operations; that’s key as creating new drugs is more complex than enhancing existing over-the-counter products.


Even though the consumer business has lower profit margins, its strong brands (some of which have been around for decades) should continue to generate steady cash flows....

The fundamentals of investing are the same for newcomers as they are for established, successful investors. The challenge for everybody is to stick to what works and not let investment fads, the media limelight or bad advice from a broker or advisor steer you off course.

The five picks for March we outline in this report are derived from Pat McKeough’s four decades of investment experience....

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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....

Allied Properties continues to build new projects, particularly in Toronto. Those developments will help it profit as more workers return to their offices. Meantime, H&R is spinning off its retail properties as part of a plan to focus on the residential and industrial segments....

H&R REIT’s net asset value (NAV)—the market value of its properties minus any mortgage liabilities—stood at $22.77 a share as of September 30, 2021. That’s 33.9% more than the current trading price of the units.


To narrow that gap, H&R now plans to spin off its retail properties as a separate, publicly traded REIT....

ENERAL ELECTRIC CO. $102 remains a hold. The conglomerate (New York symbol GE; Manufacturing sector; Shares outstanding: 1.1 billion; Market cap: $112.2 billion; Dividend yield: 0.3%; Takeover Target Rating: Medium; www.ge.com) plans to break itself up into three separate companies.


In early 2023, GE will hand out shares in its healthcare business, which makes X-ray equipment, MRI and ultrasound scanners, as tax-deferred dividends....

H&R REIT, $17.09, is a buy. The trust (Toronto symbol HR.UN; Units outstanding: 286.9 million; Market cap: $4.9 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.0%; www.hr-reit.com) has announced a plan to spin off or sell its retail and office properties in a bid to better focus on its residential and industrial segments.


H&R will spin off its Primaris properties, including all of its enclosed shopping malls, to a new publicly traded REIT that it will create with the Healthcare of Ontario Pension Plan.


Immediately following the spinoff, H&R unitholders will own a 74% stake in Primaris, while HOOPP will own 26%.


H&R also says it will sell $600 million of its grocery-anchored and essential services retail properties, its $470-million equity interest in Echo Realty LP, and $2.3 billion in office properties....

In May 2021, Brooks Automation, a leading supplier of robotic handling and sorting equipment to manufacturers, announced that it would spin off its semiconductor-related operations as a separate firm.


However, Brooks decided instead to sell this business to private equity firm Thomas H....