-
Dream Residential Real Estate Investment Trust (DRR.U)
-
Dream Residential Real Estate Investment Trust (DRR.UN)
Q: Hi, this stock has been down since its IPO at US$13.00 two years ago. Is there any hope for this stock in 2024? This REIT is quite small, so for example, could Dream privatize it, as Brookfield did for BPY ? What is the financial picture (ratios)?. If I did sale for tax loss, is it worth buying back?
If I’m right, their financial results will be published tomorrow (May9). So please comment on their earnings. Thanks a lot.
If I’m right, their financial results will be published tomorrow (May9). So please comment on their earnings. Thanks a lot.
5i Research Answer:
With a market cap of $86M, it could easily be privatized, but that is not to say it will be. It was only listed last year. It trades at 12X cash flow, which is fairly high for a small cap REIT. Yield is 6.55%, payout ratio is more than 90%. Q1 net operating income rose 3.3% to $6.1M. Cash flow per unit fell to 17c from 18c in the prior period. Occupancy was 93.8%, up from 93.7% at year end. Average rents slippled marginally ($1). Debt ratio is a low 32.2%. Results were generally consistent with management expectations. With its small size, risk, and low expected growth, if we sold it we wouldn't miss it.