RioCan’s rising cash flow is a plus

Article Excerpt

RIOCAN REAL ESTATE INVESTMENT TRUST $19 is a buy. The REIT (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 300.5 million; Market cap: $5.7 billion; Price-to-sales ratio: 4.7; Distribution yield: 5.8%; TSINetwork Rating: Average; www.riocan.com) owns all or part of 186 shopping centres and other properties across Canada, including eight projects under development. Its overall occupancy rate is a high 97.8%. The REIT continues to renew expiring leases at higher rates. Its tenant retention rate was also a high 92.0% in the latest quarter. As a result, RioCan’s projected cash flow per unit will probably rise about 4% to $1.88 in 2025. The units trade at just 10.1 times that forecast. The higher cash flow should also let the trust raise its $1.11-a-unit annual distribution rate, which currently yields a high 5.8%. RioCan REIT is a buy. buy…