Three factors underpin our bullish outlook for our favorite Canadian REITs relative to their peers south of the border.
More important, the 14 Canadian REITs in our table sport an average occupancy rate of 96 percent and enjoy rising rates and manageable debt levels relative to their market capitalizations. And with minimal debt maturities through the end of 2014, near-term refinancing needs remained limited.
An average payout ratio of 72.6 percent is the lowest in several years and has enabled these REITs to grow their dividends modestly over the past 12 months. These REITs pay their monthly dividends in Canadian dollars, a currency that’s protected against inflation by the country’s commodity exports.
Results for the quarter ended Sept. 30, 2013, suggest that there’s more upside to come for Canada’s REITs.
Most of the names in our list reported an increase in average rents but emphasized that their average rates remains below prevailing market levels.
And occupancy rates have remained steady, even for REITs that own properties in areas where economic activity has cooled. Access to low-cost financing has also enabled our favorites to pursue the best expansion opportunities.
All these trends add up to rising cash flow and dividends.
Together, these investing mavens and their team of hand-picked analysts scour the market for the best growth stocks and income-generating securities to help you build and maintain your wealth, regardless of the fluctuations in the market--think of them as your personal hedge fund.