Q: May I please have your opinion of Slate Grocery REIT for income as well as any possible growth?
With appreciation,
Ed
With appreciation,
Ed
5i Research Answer:
We think it is decent, however there are risks. SGR.UN is small at $655M in market cap but has high debt at $1.1B. Adjusted FFO payout ratio in Q1 was high at 99.4% which we would like to see come down. Portfolio occupancy was 94.4% in Q1 which was essentially flat year-over-year. We like the grocery store focus and performance has been solid while valuation is cheap. Grocery stores are a high quality customer for a REIT due to the stable cash flows they generate. We think it is a higher risk income option due to the size and debt risks mentioned.