RioCan’s malls still vital despite pandemic

Article Excerpt

RioCan’s units have suffered as COVID-19 prompts more consumers to shop online instead of at its malls. However, most of its tenants provide essential products and services. That strengthens the reliability of their rental payments and will let RioCan maintain its current distribution rate. RIOCAN REAL ESTATE INVESTMENT TRUST $14 is a buy. The REIT (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 317.7 million; Market cap: $4.4 billion; Price-to-sales ratio: 3.6; Dividend yield: 10.3%; TSINetwork Rating: Average; www.riocan.com) owns 221 shopping centres and other properties across Canada, including 15 projects under development. Its occupancy rate remains a high 96.4%. The REIT last raised its monthly distribution in January 2018, to $0.12 a unit from $0.1175. CEO Ed Sonshine reassured investors that the annual $1.44 rate, which now yields a very high 10.3%, is safe. For the 12 months ended June 30, 2020, RioCan paid out a reasonable 83.2% of its cash flow. The REIT collected just 73.3% of its rental payments…

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