RioCan’s distribution looks safe

Article Excerpt

RIOCAN REAL ESTATE INVESTMENT TRUST $17 is still a buy. The REIT (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 317.7 million; Market cap: $5.4 billion; Price-to-sales ratio: 4.1; Dividend yield: 8.5%; TSINetwork Rating: Average; www.riocan.com) owns all or part of 220 shopping centres and other properties across Canada. Due to COVID-19, RioCan collected 55% of its total rental payments in April 2020. The REIT also approved deferrals for a further 17%, leaving 28% outstanding. However, it has over $30 million in security deposits and $5 million in letters of credit it can use to offset unpaid rents. The units have dropped 40% since the start of the pandemic, which is why the annual distribution rate of $1.44 now yields a very high 8.5%. However, RioCan’s CEO Ed Sonshine has assured investors that the distribution is still safe, particularly now that Ottawa will offer bridge loans to companies unable to secure traditional financing. financing…