Calloway Real Estate Inv Trust

I do not own this stock (TSX-CWT.UN). I already have enough REITs stocks, as I currently hold both RioCan (TSX-REI.UN) and CDN Real Estate (TSX-REF.UN). This stock used to be on the dividend lists that I follow. However, it has been pulled from both of these lists as it has not increase dividends since 2008.

I updated my spreadsheet in June 2010 for the financial year ending in 2009. At that time analysts’ figures suggested that this stock will have just an ok year. The only thing that has changed is that the price of this stock has gone up. None of the estimates for earnings, cash flow or distributable cash has changed.

There are a couple of good things about this stock. One is that they are growing their revenue. Without revenue growth, they cannot grow their dividends, earnings, cash flow etc. Even this year, looking at the revenues for the 2nd quarter, the Revenue per Share has gone from $4.65 to $5.37. The other thing is that the total return on this stock over the last 5 years is over 8% per year. Considering we are in a recession, this is very good.

There are also things that are not so good about this stock. One thing that is not so good is that the Distributable Cash is not expected to grow much over this year and next and therefore, the dividends can not grow either. The other thing is that Book Value has been growing very slowly, at about 3% per year over the past 5 years. This is because the company is paying out a very high proportion of their Distributable Cash (or Funds from Operations as it is now called.) They will have to earn more money to restart dividend increases. Although, I must say that the 6.7% current yield is quite good.

There are a number of analysts following this stock and tomorrow, I will talk about what they say.

Calloway REIT is the largest owner of large-format unenclosed retail properties in Canada. Its web site is here Calloway. See my spreadsheet at cwt.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 for stocks followed and investment notes. Follow me on twitter.