Canadian Real Estate Inv.

I am reviewing this stock (TSX-REF.UN) today as I have not yet reviewed it since September 2008 and the 2008 year end annual statement has came in. I bought this stock in September 2006 and since then I have made a return of 2.6% per year. When I last talk about this stock in September 2008, I had made a return of 11.3%. This stock still has not done as badly as the TSX. It did not go as low as the TSX and it has also made a good recovery from its low.

If you look at the growth figures for this stock, some are good, some mediocre and others not very good at all. The 5 and 10 year growth for revenue at 11% and 12% are good. However, if you look at the revenue per share, the growth is only 7.4% and 5.4%. If you look at the Distributable Income the 5 and 10 year growth is good at 11% and 7%, but the earnings growth is almost non-existent at 0% and 1% for these periods. The growth in Book Value is non-existent also. However, this is to be expected as this company is paying out in dividends more than the cash flow.

As with other REIT stock, there is no reporting on current assets and current liability, so there is no liquidity ratio on this stock. The Asset/Liability ratio has a long term average of 1.71. At the end of 2008, it was 1.40 and this is a little low, but for the quarter ending at June 2009, this ratio is 1.50. I would prefer that this ratio be 1.50.

The Return on Equity (ROE) at the end of 2008 was 10.9% and the 5 year running average was 10.5%. Both these ROE figures are good. The ROE on this stock runs at 9% and 10% and this is good. A few times in the past, it has dipped to 7% and 8%.

Currently I will hold on to my shares. We are in a recession that is especially hitting Real Estate. I expect this stock will do well in the long term.

This is an equity real estate trust, which acquires and owns a portfolio of income-producing properties. It specializes in the acquisition and ownership of community shopping centers, industrial and office properties across Canada. This company owns office, industrial, retail properties and some miscellaneous items such as apartment buildings. Its web site is www.creit.ca. See my spreadsheet at www.spbrunner.com/stocks/ref.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets.