Q: Please comment on Firm Capital's recent results. I know you have considered it a high risk income stock but given that it has gotten its payout ratio down to 100% and its limited mortgage renewal over the next two years plus having high rate of occupancy in properties that are in demand, do you feel better about it now?
5i Research Answer:
With its small size and focus on one specific market area, and sensitivity to interest rates and real estate, we will likely always consider it 'higher risk' than average. In the Q3, EPS of 25c missed estimates of 28c; Income was largely flat year-over-year. The investment portfolio rose 6.7%. Impairments were $24.2M vs $22.7M the prior year. 12-month rolling payout ratio is moving lower and this adds some comfort. The other points as noted in the question are positive. We rates moving lower, we are a bit more comfortable overall.